Its Not Harry

Comment and opinion for retail investors in the UK

Education

March Briefing – out of the ordinary events

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I did not have a specific subject lined up for a Deep Dive article this month and this weekend’s events in the Middle East are significant enough for me to think that I would be offering more help to readers by commenting objectively and calmly on the implications for portfolios of the US/Israeli attack on Iran and the emerging military and other consequences, especially the type and scope of retaliation and the actions of other global powers.

Some of what might be coming for economies and markets will be no surprtise for those of us old enough to remember the early 1970’s, I suspect, but the world is at least a little different – plus the starting point is inverted in terms of who attacked who.

I don’t think it would be useful to offer any instant analysis when we have so little to go on, seriously concerning though it is. I will allow a few days of events to accumulate before offering my thoughts in any detail.

Whatever, investors globally will tomorrow be acting to deal with hugely worsening risks to growth and inflation. Expect to see a lot of volatility!

Any subscriber with specific questions can comment on this post or email me direct.

Deep Dive – February 2026

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This month, I will be passing on my thoughts on investing in Emerging Markets in the Trumpian world. 

Introductory Remarks

Most readers will know that the classification by the UK Investment Association of the Emerging Markets sector results in it incorporating funds that have very significant overlaps with funds in the Asia Pacific Ex-Japan sector, which I wrote a little about a couple of weeks back. 

In reality, there are funds named for Emerging Markets that are full of shares in companies from regions that are now fully emerged (like South Korea) and are in fact well know global businesses on a par with similar firms in the USA and Europe, companies like TSCM, Samsung and Hyundai, not to mention the Chinese internet and retail operators like Alibaba and Tencent.

This is one aspect any research needs to take into account.  Finding true ‘discovery’ or ‘frontier’ funds or even investing at all in smaller developing counties as was really possible 30 years ago, is much harder if you want to use OEICS/funds.  ETFs may offer more focused choices, but as ever, will more likely be index tracking and that brings some disadvantages, amplified when the target markets are volatile.  This article does not extend to ETF commentary.

Is owning emerging markets all about balancing assets?

Another hazard that would have been unimaginable even a few years ago is the level of political risk, most obviously in the form of (on/off) tariffs, which may be unexpectedly announced in an overnight post on Truth Social (maybe then TACO’d), and also a real risk of military actions, not necessarily in emerging market regions (although Venezuela arguably is) but which would impact global trade in unexpected ways, spook markets and so on. If markets are selling off, as a general rule emerging markets are going to be selling off more sharply, simply due to liquidity limitations.

By now, you may be thinking: ‘given the above, why bother?’ I think that would be a fair question.

However, in 2025, to my personal surprise, Emerging Markets was one of the best performing regions in US Dollar terms.  In fact, the well understood and possibly ongoing depreciation of the greenback is one of the tailwinds for developing counties, because many will have US Dolar denominated debts that are now rather cheaper to service from local currency or with other currencies earned from exports.    

Furthermore, the AI capex boom and European defence spending will both generate manufacturing demand for components of not only the electronic variety, and the cost of producing those components will be cheaper outside of the developed world, so there could well be a second wave of demand for stocks in companies not so large as the Nvidias and TSMCs of this world. Of course, even the companies of the Mag 7 will be manufacturing or sub-contracting to emerging nation workforces.

So maybe this an asset segment at least worthy of some attention.

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Caution – potential ‘Black Swan’

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Possibly only visible to a skilled ornithologist with the best of binoculars, there is not so far offshore a black swan detected.

To cut to the chase, as they say (although I personally deplore the hunting of birds), the potential significant, even catastrophic risk for investors is changes in the Japanese bond market.

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Mid-Month Musings

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As I explained in my email at the end of last year, my plan for 2026 is to post a detailed Deep Dive article as previously at the start of the month and then add another post, which will be of whatever content I think might be useful to readers, in the middle of the month. As always, I can research and write a piece on request, if any reader wants me to.

In terms of word count and read time, the longer article will be about 2500 words with a 10 to 15 minute reading time required (and perhaps complex enough to require a second look over!) and the mid-month pieces about 1000 words and only 5 minutes demanded!

This month, I have been thinking about the markets which I have a less concrete or confident opinion about. I am pretty sure that it makes sense to invest less in the USA and more in Europe and the UK and I don’t see merit in spending time on the Japanese market, so that leads me to focus on the Asia Pacific ex-Japan region and on Emerging Markets, which two sectors would have quite an overlap in a Venn diagram.

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Deep Dive – January 2026

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This new year I will take a classical approach and do the look back and look forward that underlies the naming of the month.

I usually read what I wrote a year ago at the start of any new cycle but I note that I deferred offering a full opinion on the impact of Trump’s election until after his inauguration, so the blog post to reference is the one for February 2025.

My analysis of Trump’s likely behaviour was accurate in almost every detail.  My expectation that the US Dollar would lose credibility was also correct.  However, I did not foresee that AI would be far and away the main corporate story of the year and that the bubble I was worrying about 11 months ago would keep inflating.  I was right in my expectations of a poor climate for healthcare stocks and that money would flow into defence industry shares.

So how did markets perform in 2025?

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