Santa rally ahead?

It’s a festive tradition to discuss the prospects for a ‘Santa rally’ – will markets deliver this year? It seems that at this time of year there are two choices: to talk about Brexit or to discuss the merits of a Santa rally.  With Brexit, no one knows what is going on, and nothing will … Continue reading “Santa rally ahead?”

Inescapable investment truths for the decade ahead

It seems clear to us that the world investors have got used to over the last few years is very different to the one we need to get accustomed to in the years to come. We have identified a number of economic forces and disruptive forces we think will shape the investment landscape ahead of … Continue reading “Inescapable investment truths for the decade ahead”

Fear not – volatility is normal

After the long period of rather calm markets in 2016-17, we predicted that from 2018 onwards, we would see a return towards more normal levels of market volatility. Swings up and down in share prices – even big moves – are normal behaviour for markets. The upside from investing in equity markets is the potential … Continue reading “Fear not – volatility is normal”

UK economic outlook hinges on May selling deal

The UK government and European Commission have announced that the broad terms of the UK’s Withdrawal Agreement have been finalised. This lays the path for completion in the next few weeks, and the UK entering a transition period following its exit from the European Union on 29 March 2019. The 585-page draft agreement follows most … Continue reading “UK economic outlook hinges on May selling deal”

How to survive a zombie company apocalypse

Zombie companies do exist but are not staffed by people that behave like extras in the “Walking Dead”. Actually, a zombie company is a technical term for a business which, if it is not yet numbered among the undead, is only earning just enough cash to pay the interest on its borrowings. It does not … Continue reading “How to survive a zombie company apocalypse”

Panic not: earnings season matters more than the current rout

Once again, markets are roiling. As with so many sell-offs, this is a story of pressure building steadily until it must vent. Volatile markets are here to stay, but the next few weeks will tell us whether this episode is a sign of something more ominous to come or just another bump in the road. … Continue reading “Panic not: earnings season matters more than the current rout”

Europe’s struggle to break free

At the start of 2018, it looked likely that interest rates could start to rise across Europe, signalling the end of the necessary post-crisis readjustment in the financial sector. However, as is often the case, the themes that drive markets at the start of the year can often be forgotten by the end. As 2018 … Continue reading “Europe’s struggle to break free”

The Only Game in Town

The US stockmarkets were the only game in town in August. US stockmarkets provided the only positives in August posting another month of strong gains due to robust economic news-flow.  However, all other major global regions showed negative returns, with geopolitical issues and trade war concerns weighing on investor sentiment. The overall result was a … Continue reading “The Only Game in Town”

Hubris and Nemesis: insights into the financial crisis

Ten years ago, the demise of Lehman Brothers marked the height of the financial crisis. At the time, I was an economist at one of the UK’s largest financial institutions. Working there gave me abundant insights into the psychological biases at play, both in that institution and in the companies that it supported. Many of … Continue reading “Hubris and Nemesis: insights into the financial crisis”

Doom Loop

The most likely candidate for the next ‘Lehman moment’ is in Europe. In some ways the regulatory response that followed in the years after the collapse of Lehman Brothers has been a success. The days of racy balance sheets chasing outsized profits on wafer thin capital are largely over; replaced by a mantra of prudence … Continue reading “Doom Loop”

Emerging markets: increasing or decreasing risks?

So far, 2018 has been a difficult year for emerging market (EM) assets, which in the last few months have fared significantly worse than their counterparts in developed markets. This has been due mainly to worldwide issues but also country-specific political uncertainty. Many investors are now asking if the sell-off presents a buying opportunity – … Continue reading “Emerging markets: increasing or decreasing risks?”

This bull market has relied on technology shares

This has been a long and unusually hesitant and worried bull market. Indeed, there have been a substantial number of sectors that have lived through their own bear markets whilst the overall indices push on to new highs. The US has outperformed the other advanced country equity markets and China easily over the twelve months, … Continue reading “This bull market has relied on technology shares”

The potential income shock awaiting pension savers

A global study of investor attitudes finds that those close to retirement expect to replace 74% of their salary when they give up work. The reality for those already retired is very different. After a lifetime of saving, investors may be in for a shock when they come to retire, the results of a global … Continue reading “The potential income shock awaiting pension savers”

Millennials will reshape the investment landscape

Millennials are the largest generation that have ever existed. They are expected to make up 75% of the global workforce by 2025 and the way they spend their money will define the world over the course of the next few decades. With half of the world’s population currently under the age of 30, the values … Continue reading “Millennials will reshape the investment landscape”

Why UK-focused stocks look their cheapest in a decade

Uncertainty about the country’s long-term relationship with the European Union, its biggest trading partner, has left many international investors nervous about investing in UK companies. One recent poll showed that UK stocks were the least popular asset class among global fund managers. I disagree. I can see bright spots in the UK stockmarket that offer … Continue reading “Why UK-focused stocks look their cheapest in a decade”