Like the UK, Latin America has suffered greatly during the pandemic – perhaps even more so. The World Bank estimates that regional GDP may slip by as much as 8%, with more than four million…
Global Convergence
The idea of convergence in economics gained currency in the 1990s on the back of the theory poorer countries’ per-capita incomes tend to grow at a faster rate than those of richer economies. Hurdles include…
Market Round Up – The Calm Before the Storm
Despite a calm exterior in terms of broad market price action, the under currents remain strong. The UK remains front page news with the Pound hitting multi-decade lows. However, it is the more subtle changes…
The political implications of the referendum on the investment company sector
How BREXIT might affect the underlying performance of investment company portfolios over the long-term remains to be seen. In these early days, equity markets are holding up well, up about 5%, and the sector’s exposure…
Week in review: The best of times and the worst of times
It was a week of contrasts. Sterling fell to its lowest level against the dollar since the mid-1980s, and its lowest against the euro in five years. But it was also a week in which…
Chart of the Week Shows Record Extreme Valuation for Bonds and Equities
We finally got round to reading the Annual Long Term Asset Return Study published by Deutsche Bank. As always, this is a little treasure trove of charts and information and well worth the time spent…
Week in review: A crude awakening
Fears over the financial health of Deutsche Bank flustered investors at the start of the week. But signs that energy prices might be rising from their slumber provided some solace, resulting in a positive week…
Europe: A contrarian investor’s view…
The UK’s referendum on membership` of the European Union has produced very little, so far, in terms of concrete change – instead it seems to have become the most bitterly fought contest to see who…
Active Management
The main criticism of active management is that the cost of performance is expensive relative to passive investing and that most active managers underperform. But funds which have a high “active share” typically outperform. “Active…
Central Banks Guarantee the Next Financial and Economic Crisis
“When the music stops…things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” -Chuck Prince, CEO Citigroup July 2007 “There is only one…
Week in review: What the Fed said
A familiar sense of anticipation settled over investors awaiting the result of the US Federal Reserve’s September deliberation. By and large, analysts and commentators expected the central bank’s interest rate-setting committee to hold firm and…
With decreasing interest rates, why should investors consider investment companies?
Following the Bank of England’s interest rate cut, David Prosser discusses where income seeking investors could be looking. There aren’t too many certainties in the economic and investment outlook in the months ahead, following the…
Behavioural economics and finance
The central tenets of modern portfolio theory and beliefs in rational markets have been found wanting. Critics have observed that Sharpe’s “Capital Asset Pricing Model” (CAPM) and the Modigliani-Miller theorem were written during periods of…
Central Bankers Hold Markets Hostage
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” - Warren Buffett For several weeks, we have intended to write about some of the structural…
Market review: market jitters
As we move towards autumn, signs of volatility are creeping back into markets. One of the main questions at the forefront of investors’ minds is how soon the Federal Reserve (Fed) will move to raise…
The Folly of Predicting the Markets in Retirement Planning
I think it is fair to say that the market reaction to Brexit took most people by surprise. While there were the inevitable few days of falls following the announcement of the result, the following…
Markets Dump after a Cocktail of Negative Issues
Financial markets have just suffered their worst week since February. The catalyst would appear to be a cocktail of rising bond yields precipitated by either concerns over a potential rate rise from the Fed or…
Market review: slow progress
The Brexit discussions rumble on. Two and a half months on from the 23 June vote, the details of Britain’s proposed departure from the European Union (EU) remain unclear. Perhaps worried that the phrase is…
Funds for heavy weather
Markets have recovered since the UK referendum, but the impact of the UK’s historic vote on the underlying economy will not be apparent until data begins to come through in the later part of this…