Markets
Watching Brief – September 2021
Pottering About
We are entering a hazardous time of year for investors, so an ‘accident black spot’ sign has just flashed, as we happily motor along with our portfolios running sweetly and the speedometer reading some 10% above the legal speed limit which seems fine given the conditions. The speed being our enthusiasm for risk!
According to Investopedia, the (ancient) Dow Jones Industrial Average has declined 0.8% on average in September months since 1956 and the S&P500 (more realistic a measure) has declined 0.5% on average over an unspecified period. This is said to be a global pattern, not just affecting US markets. In fact, the NASDAQ, established in 1971, has performed much the same.
In more recent years, September sell offs have been less significant but that might just be because trading is now more dependent on algorithmic decision making and less on human behaviour and the summer holiday season of the Northern Hemisphere!
Does that mean we should be selling equities and sitting on cash (or more cash for most of us)?
I would suggest that would introduce potential market timing errors, although banking profits, especially if you need a return from your assets to maintain your lifestyle or fund some purchases, must make sense.
Midweek Musings – Miscellany and a mild rant
With the global news media focusing on events in Afghanistan, financial matters have not been much in the headlines this week, but there have been relevant news items for investors thinking about their asset allocation decisions.
On the former geopolitical drama, I find it incredible that the UK ministers supposedly responsible for UK policy appear to have had no relevant intelligence. By that I mean from the military and also between their ears.
This week I will put under your nose a small selection of news snippets that I think might inform your portfolio reviews and trading decisions.
Watching Brief – August 2021
Midweek Musings – late for a reason
Readers who pay frequent attention to their portfolios and the general level of stock markets will have noted , perhaps with some concern, the sharpest sell off in equities for quite a while at the start of the week. Bond yields fell (making bonds worth more), which seems odd given that nearly everyone invited to comment seems to accept that we in for some serious inflation.
The mainstream media put the equity sell off down to concerm about the Delta version of the Covid-19 virus. That was obviously spurious given that the sell off was global and dramatic without there being any really new news on that subject. So there must have been another reason. I decided to wait and see what happened next, having a fairly good idea of what was really going on. That is why this post is a little late.
Watching Brief – July 2021
Pottering About
I have written before about my judgement that equity markets were overvalued at the end of 2019 never really getting tested because the advent of Covid-19 and the response of global governments (ie a huge stimulus of ‘free’ money) created a set of conditions that were way beyond the normal market cycle.
I have argued since that the flow of cheap money and one other factor that I have repeatedly mentioned, the arrival of novice retail traders with new technology at their disposal, has been propelling valuations along for equity shares and some new asset classes like crypto ‘currencies’ and their plethora of proxies.
I think we have seen enough since March 2020 to come to some new conclusions.
Half yearly pause for thought
As inflation rears its head and there is talk of rising interest rates – see next article for some analysis of the direct impact of this – and the Covid crisis is becoming normalised in Western economies, perhaps we should consider the Covid deflection almost fully worked through? Certainly, we must be close to the end of ‘spend, invest and be merry for tomorrow never comes’ era for governments.