Market Insight 2018

December 2018

The Stag and his Reflection

I was sat with my godson at the weekend choosing a bed time story. To my surprise I was handed a copy of that well known and staunch guide to childhood morality – Aesop’s Fables. I picked one which I had not read before titled, “The Stag and his Reflection”. The abridged version goes like this: A stag bends down to drink from a stream, whilst doing so stops to admire his impressive antlers in the cool reflection. At the same time, he ashamedly notices how small his hind legs are in comparison to his large antlers. At that instant...

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November 2018

Is it crunch time for Trump?

After the volatility we saw in October investors would be forgiven for thinking markets were long overdue a respite from the assault of disruptive headlines. Indeed, Trump seemed to give us just that when he announced a new desire to strike a trade deal with China last week. Before we can digest the potential of this we have to address the elephant in the room which is tomorrow’s very partisan US mid-term elections which have the potential to upset the already volatile applecart of global markets. First off, what are the US mid-term elections? Well, in laymen’s terms, they are...

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October 2018

Is it time to run for the hills or stand your ground?

Earlier this month in a note to clients, TAM's CEO alluded to the return of volatility and extolled the virtues of owning a defensive investment strategy in these uncertain times. Well, since then markets have been unable to shrug off a sense of gloom, forcing capital markets deeper into negative territory to the point that we want to revisit the topic of volatility...

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October 2018

Has the bear returned or is this merely a tremor?

Markets have taken an unfamiliar tumble based on news that is not really any different than that pervading over the past 3-4 months. So why now, and how serious is it? We cannot hide from the fact that we are 10 years into a bull market which began in April 2009, and for the most part the relatively steady annual gains and low volatility during the past 5 years have been embedded in our clients’ psychology - there was talk of the new norm. But now with volatility spiking and some short-term selling driving an element of fear, we need...

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August 2018

The Famous Five Save Global Markets

Few investors amongst us won’t have heard of the exploits of the Famous Five, a group of four school friends and their faithful dog Timmy. This iconic group of lifelong friends, whilst on summer holidays in the English countryside would embark on a series of adventures which either resulted in the uncovering of buried treasure or the foiling of whatever criminal exploits were taking place around them. Now, whilst the stock market is not the Dorset countryside and stocks and shares don’t need rescuing from erstwhile smugglers, today’s equity markets are arguably in trouble. It just so happens we do...

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June 2018

Shout loudly and wave a big stick!

President Theodore Roosevelt once said, in relation to US foreign diplomacy, “Speak softly and carry a big stick.” It seems President Trump has re-tasked that phrase to read, “Shout loudly (over twitter) and wave a big stick as often as possible.” The definition of a “Pyrrhic victory” is essentially where the pursuit of victory inflicts such a devastating toll on the victor, that it eliminates any benefit of being the victor. In modern history the phrase is usually reserved for nuclear war, wherein the last nation standing would be the victor, but standing in a radioactive wasteland, which negates the...

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June 2018

“That’s another fine mess you've gotten me into!”

In the wake of the last Italian election, we released an article highlighting the volatile nature of Italian politics. Since then, and true to form, Italy has managed to deliver another bout of political chaos which now marks the longest period of uncertainty for Italian politics since WW2. We will endeavour to explain where we are on this roller coaster and our position for clients. The coalition of the Five Star and the Justice League may have the majority vote from the people, but they still need to have cabinet approved by the Head of State, President Sergio Mattarella. On...

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April 2018

How will the trade war between US and China affect your investment portfolio?

When US President Donald Trump came to power last year, he brought with him an ambitious list of goals, including; building a wall between the US and Mexico, preventing some ethnic groups from entering the US, reforming corporate tax, withdrawing the US from climate pacts and addressing the trade deficit with China. He wanted to drain the swamp and fight the status quo - a rebel if you will. He promised to shake things up and has recently been doing just that, by pursuing his protectionist agenda - much to the dismay of global markets. The threat of a so...

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March 2018

Germany are ahead but can the Italians equalise?

Much has been made in sporting history about German-Italian football rivalry. The two most successful football nations in Europe have made a collective fourteen appearances in FIFA Wold Cup finals, which is more than the rest of Europe combined. However, more recently, it is very much the German team who showered themselves in glory by lofting the 2014 World Cup trophy in Brazil. This success comes in stark contrast to the Italian team who very publicly failed to qualify for this year’s game in Russia. It would appear then, with all eyes on the German team defending the title at...

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March 2018

Is there life in the old frog yet?

February was certainly one of the worst months for stock markets since 2008. A profound inflation scare led to US equity markets plummeting over 12% in just two weeks before rebounding strongly. The drama is not over and we remain firmly in the grips of these wild swings with markets falling again during the final days of the month. Are we heading for another recession or simply a period of heighten market volatility? Well, we know predicting recessions is not an easy game. Indeed, one of the IMF’s chief macroeconomists, Prakash Loungani, recently observed that, over history, economists had consistently...

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February 2018

Sorting the 'Wheat from the Chaff'?

Global equity markets have fallen and volatility has spiked. We ask if this will sort the 'Wheat from the Chaff'? For nine years we have enjoyed a steady, if not rampant, Bull market. The disaster of 2008 seems long gone...and it is. For almost six years now, it has been a story of almost unquenched, steady growth in financial assets and benign volatility. Many investors have been lulled into an almost catatonic state of assuming consistent and steady gains, month after month. Indeed, with equity markets constantly setting new highs with little or no drawdowns it is understandable why. But,...

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January 2018

US equity market: Is this what they call an “up crash”?

With the global bull-market in equities entering its 10th year we have, since the financial meltdown of 2008, lived through an era of long term positive investment return. No matter what has been thrown at these markets over that time, they have (almost) serenely sailed on to new highs. Volatility has collapsed and investment return remarkably consistent for managed style portfolios. Great for clients and for all of us in the financial services industry if we simply stayed on piste. The US market has been the lynchpin that’s driving this global rally, not China, not oil and not Bitcoin. The...

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