Away from the noise , and busy inboxes….full of the usual cliches,

“Buy for the Bounce” “Comparison with 1929” “This time its different” “Conspiracy theories” “100% cash” “100% US tech” “Blood on the streets” “Correction territory” “Stagflation” Globalisation is good/bad…. China is the ultimate winner etc etc

Some hard facts

MARKET MOVES

Pretty much equity falls across the board last week amongst the major markets. However UK and Europe outperforming year to date for obvious reasons
Huge jump in VIX….but not reaching previous crisis levels…VVIX also new high….so option writing very profitable opportunities for the brave
UK Sectors – Food,tobacco,utilities providing some resilience over the week. OPEC announcement (conspiracy theory with Trump!) interesting timing!
Overall gilt index up 1% YTD….plus income…so not so shabby,….With UK equity total return very slightly positive….actual unit trust returns
Dollar weakness story of the week and story so far this year
Note the effect of FX to £ based portfolio…..now over a 21% year to date difference between USA and Germany
Commodities flattish overall but very varied eg gold versus bitcoin,coal,oil
UK investors currently experiencing a flat return….the more cautious slightly better

LOOKING FORWARD

With so many different risk/time profiles amongst my readers, it would not be appropriate to give a blanket asset allocation/stock picking view…but many risk /opportunity ideas.

Remember that two primary drivers of equity prices are earning growth and the discount rate you apply to that earnings growth. Currently the first is impossible to calculate with so many moving parts…..and the second depends on how inflation/debt develops. There will be losers….and winners..in this environment in both the short and long term for both trading and long term investing (the majority…..remember the 120 year gilt/equity study I sent). Over 10 year periods…shares beat cash 91% of the time.

Stay diversified across asset classes,geographies,sectors and stocks…and do your homework!

Think of starting an ISA now

UK Blue Chip
High income-low risk and high risk
Non-equity
Global portfolio
Non-US portfolio
Cautious
Aggressive/growth…including tech!
ETF portfolio
Investment Trust portfolio
Hedging-derivative products…offer partial protection to your existing portfolio..option writing,puts,Volatility trade etc or any combination of the above. Something for everybody!

NEWS Flow…

Be aware of grey swan,black swan events, unanswered phones, platform crashes,counter party risk, fund blow ups,late or no show fund manager reports, benchmark changes, lower liquidity, higher spreads,tail wagging dog ETF episodes.

These things happen….1987..late 90’s,dot com,GFC,Covid,Japanese carry unwind.. now add Tariffgate..and will happen again

NORMAL HEALTH WARNINGS

Ken Baksh BSc FSIP FCA Society of the UK

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DISCLAIMER
Important Note: This article is not an investment recommendation and should not be relied upon when making investment decisions – investors should conduct their own comprehensive research.
In accordance with FSA RG 8308.2,this is not a recommendation to buy,sell,subscribe for,exchange or redeem. The recommendation and are not meant to be relied upon in investment decisions. The author is not acting in an investment, tax, legal or any other advisory Disclaimer: Opinions expressed herein by the author are not an investment capacity. This is not an investment research report. The author’s opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies’ regulatory filings, and consult a qualified investment advisor. The information upon which this material is based was obtained from sources believed to be reliable but has not been independenThe tly verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication and are subject to change without notice.The author may hold positions in any of the securities mentioned The author explicitly disclaims any liability that may arise from the use of this material
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