We had been bullish on stocks all the way back to March 2009, when mark-to market accounting was fixed and the Financial Panic started to recede. At that time the S&P 500 traded as low as 677. What a time to buy! After that we remained bullish. We didn’t recommend selling in spite of a wide range of fears that spooked many others, including the Great Recession lasting … [Read more...] about More trouble ahead
Investment strategies
Why the US dollar matters
Over the past 15 months, the US dollar has strengthened at an accelerated rate. Since May 2021, the nominal broad US dollar index—a measure of the trade-weighted value of the US dollar against other advanced and emerging economy currencies—has risen 10%.1 That is its strongest advance since 2014-2016 and takes the dollar index to its highest level since 2002.2 Adjusted for … [Read more...] about Why the US dollar matters
A new era for UK fiscal policy, but will the gamble pay off?
A new prime minister, new chancellor, and a new era for UK fiscal policy. Following the change in leadership of the ruling Conservative party, the new Chancellor of the Exchequer, Kwasi Kwarteng, has truly delivered a landmark fiscal statement, ushering in a new era of lower taxes for the UK economy. Kwarteng delivered a skilful and concise statement that left audiences with … [Read more...] about A new era for UK fiscal policy, but will the gamble pay off?
Why bargain hunters should be shopping in Europe, not the US
Value stocks in Europe are the “unloved of the unloved”, but they have actually offered more growth than growth stocks. Here, three charts tell the story. The value investor has become something of an endangered species over the last decade, pushed to the side-lines of a market fixated on seeking never-ending growth in areas such as technology.The underperformance of the … [Read more...] about Why bargain hunters should be shopping in Europe, not the US
The cost of bad behaviours
During periods of market sell-offs, the natural human reaction is to contract our investment time horizons and focus on short-term negative noise. It’s at just such times, when our instincts may lead us in the wrong direction, that a well-established investment process can help to avoid behavioural pitfalls. Such a process might usefully include: Modelling scenarios for … [Read more...] about The cost of bad behaviours
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