Market Insight 2020

Looking back on this year, professionally and personally, I think few would say it’s been a forgettable one. The herculean strength in the stock market couldn’t stand in greater contrast to the very real pain being seen in households. In one part, myself and TAM are elated to have been able, for almost all clients, to make back 100% of the losses sustained after that record breaking sell off in Q1. But also, in the last couple of months, see clients posting gains for the year. Whilst this is a wonderful scenario to be in and one which I don’t...

Investor or not, everyone outside of small villages in the middle of the Amazon knows we now have a viable vaccine inbound into our local GP any day now. What most will also know was this news lit a fuse under markets and pushed them higher in November, so high in fact that it broke all records for a one month rally. Unfortunately the problem with record highs is it's a lonely place to be with a lot of potential downside. I want to draw your attention to something which I feel will move markets in the not too distant...

The Investment Week Sustainable & ESG Investment Awards ceremony took to the virtual stage this year in honour of the fund providers, research and ratings teams who have contributed to the significant progress that has been made this year in driving the growth towards ESG investing. Interest in ethical and sustainable investments has risen dramatically this year, as individuals and institutions have recognised the need to take sustainability risks more seriously in order to protect capital during difficult market conditions, but also to help deliver alpha, by aligning investments to key growth areas which will drive future investment returns, including...

News of vaccines coming in will likely prompt other big pharma companies to announce their successes as we move towards Christmas. Whilst that’s going to be a big boost to newspaper headlines for households across the world, I think on Wall Street, each new entrant announcing their success will lose a little market elasticity in terms of reaction size as investors move to a more pragmatic and measured approach to buying into the COVID relief rally. Whilst a more measured response is not as exciting as markets ripping higher, it’s exactly this measured tone of investor reaction which we want....

Yesterday an understandable sense of euphoria swept equity markets only a week after most of Europe was plunged into a second lock-down. Positive vaccine developments and the near certainty of a Democrat in the White House resulted in the best daily stock market performance since March. Sectors that had been effectively written off in the new COVID world roared back to life; travel related companies such as airlines, cruise ship operators, aeroplane engine manufactures, even cinema groups rallied over 30%! Simultaneously companies that have been the biggest beneficiaries of the pandemic lost some of their lustre as investors rotated into...

We have long been advocates of active investing over the alternative of investing passively into the market via an exchange-traded fund (ETF) or index fund. The recent rise in demand for investments that contribute towards positive Environmental, Social and Governance (ESG) factors has been met by a rapid increase in supply of both active and passive investment options. For us, there is a clear danger in going passive in a market which relies on the integrity of the companies it invests in to keep driving change. What’s more, the traditional benefits of holding passive over active investments are not as...

Make no mistake, the stakes are even higher this time around because Trump is already the sitting president so he’s moved from underdog to top dog and with that voters are going to expect him to up the stakes on the campaign trail. Normally raising the stakes like this might be exciting but with Trump’s behaviour polarising the US voter base like no other President in history, I think it's safe to say this 2020 presidential election will likely go down in history. Now, it wholly depends on your leaning towards Trump which varies from person to person but consensus...

Q2 has been to the bull market what Q1 was to the bear market. The first quarter saw the MSCI World down 20% in record time (a little over 5 weeks) propelled lower by COVID-19 and a synchronised oil market crash. Inversely, Q2 has turned into one of the best quarters on record for global stock markets with the MSCI World recovering strongly back to pre COVID levels. Irony abounds in this Q2 rally as history will likely show us the second quarter of 2020 was the quarter when the world entered a global recession, not to mention the large...

It’s strange to be writing once again about Brexit and I suppose that’s indicative of the relapse in new UK COVID-19 cases which is a golden lining to what could rapidly see the resurgence of Brexit volatility coming roaring back. From where I am sitting, with EU / UK trade talks reaching a crunch point in the next couple of weeks. The prospect of a Brexit trade deal is well and truly having a drink at the Last Chance Saloon. What makes the trade deal so interesting is the survival of the UK equity market, fixed income market and the...

Welcome to our complete investment guide to helping you and your clients navigate through an evolving financial landscape during a pandemic. The coronavirus continues to affect our day-to-day lives and we want to share the ways in which we are adapting to this new reality in order to protect clients’ assets, and our strategy for taking advantage of the inevitable market recovery. Our investment management and operations teams have decades of industry experience, having survived a number of market falls in their lifetime. This has provided them with the depth of knowledge and understanding to manage different market cycles and...

What is your favourite COVID television series? As many around the world hunker down, online streaming has come into its own. Be it new shows or recycled classics, everyone has their preferred “go to” genre to escape the reality of our self-imposed incarceration. Watching the stock market over the past week I was taken with the idea of “The walking dead” which is essentially a group of characters banding together to survive a zombie ridden dystopia. It drew my focus onto the realities of corporate survival in today’s world and what we might be faced with on the other side...

Perhaps you, like me, have been watching these markets rallying back to within range of their previous highs at astonishing pace. So much so that this rebound has been coined the most hated rebound in history. Why? Well, it’s caught most investors off-guard who are underweight equities, there also remain a huge amount of investors short of the market (investors who bet on the market falling) and finally, there are record levels of cash sitting on the side-lines not being invested. So where do you sit? Are you cheering them higher or, as I am, watching through parted fingers as...

The present financial market conditions represent nothing that we have ever witnessed before and hope we will never witness again. A battle is taking place on the frontline and it’s not only the truly heroic global medical profession that’s fighting it. Who would have believed that, given the global lockdown and huge devastating spikes in unemployment, the almost complete closure of the gig economy, the collapse of company earnings, and core companies abandoning dividend payments would have been taken so lightly? The limitless financial government funding in the US for supporting real estate, high yield investments, mortgage backed bonds and...

Needless to say that the events of the last several months have caused large scale disruptions to lives of the global population. Perhaps one of the only beneficiaries from the enforcement of global lockdowns across the world is our environment. Our air quality has improved due to the fewer cars on the road, our skies are free from the condensation trails left by aircrafts, while in Italy, the Venice canals have never looked clearer, as motorised boats and giant cruise ships have disappeared. All this has led us to question whether this COVID-19 induced market sell-off will have changed the...

With global markets staging a healthy recovery last week, investors hold their breath as to where we go from here – higher or lower as the game show likes to say. Central banks and governments the world over have thrown the proverbial kitchen sink at stimulating their economies, so now that silver bullet has been shot, all that remains is for markets to watch the progress of contagion and evaluate how effective the stimulus packages are in offsetting a severe recession. Whilst this is a deeply concerning inflection point for investors, there is some evidence of a Chinese recovery taking...

All of us in business will have been affected operationally by the extraordinary spread of Coronavirus COVID-19 over the past weeks. We wanted to let all of our connections know that as a result of what is our existing business operational integrity, we have needed to take only limited steps to ensure the ongoing functionality and controls over our clients’ assets, their needs and requests, and ongoing efficient portfolio management. As a DFM at the forefront of technology and working with one of the strongest custody agents (Pershing Securities) we are prepared to deal with these exceptional circumstances, albeit not...

“The value of your investments can go down as well as up". Being investment professionals, you will all be familiar with that phrase because it’s plastered on every piece of literature in the investment industry. Whilst it’s unavoidably true, it’s a cold and sterile statement that entirely overlooks the emotional roller coaster that accompanies a major sell-off. We say this because it’s very relevant to the last three weeks in global markets which have seen equities drop inmagnitudes not seen since 2008. Yes, it’s a stressful time for managers of portfolios but we just want to say to all of...

TAM Colleagues, have you ever watched a stage of the world rally championship? The only thing more impressive than watching the rally cars drift around impossibly tight corners at breakneck speed is the skill at which it takes the rally driver to achieve this without coming a cropper. 'Feathering the throttle' is a technique used to apply the lightest touch to the accelerator propelling the car around the corner with the perfect balance of speed and control without overshooting and crashing. As with everything that requires skill, it’s hard to do and prone to going wrong. The driver’s fine line...