I present below some data comparing investment segments to which most investors would think about allocating a moderate slug of their diversified portfolios. The percentages are capital returns on the index with income re-invested (Source: MSCI)
Education
Watching Brief – June 2022
Pottering About
Where are we now?
During the course of May, I wrote that there were strong signs of a market capitulation which might be the ‘low’ in the downturn that we now know started in late Autumn 2021. If so, this would have been a correction deep enough to be called such, but relatively short. I suggested that the most recent market corrections we have seen have all been quite short for reasons to do with the amount of automated market transactions, I suspect.
Since then, a period of about 2 weeks, markets have moved up and in fact last week was the first one in a long while when the US main markets closed up on the week.
Midweek Musings (late!) – using equity income funds in a downturn
I have written a couple of pieces to introduce this subject and I had promised to comment on some specific funds last week.
However, I thought that the possibility that there was a ‘bottom’ in the market at that time (an idea that is still holding good, but it is early days yet) was a more urgent idea for your attention a week ago, so the global dividend/equity income fund examples got deferred.
Smug Harry
For some time, maybe over a year now, I have been telling anyone interested that owning fixed income funds was not going to be defensive in the near term. The classical non-correlation with equities was not going to work.
This was important to owners of the passive multi-asset funds that ONLY use fixed income assets in a set mix as volatility controls. The Vanguard LifeStrategy funds would be a good example.
Midweek Musings – the biggest losers (again)
Watching Brief – May 2022
Pottering About
As usual when starting this monthly commentary, I looked back to see what I wrote a year ago and in fact it was absolutely relevant on this occasion. I was prognosticating the potential impact of central banks raising interest rates to tame inflation. I took the general line that such actions might not be that effective based on prevailing conditions but that if the central bankers decided that the way to make rate rises more effective in slowing inflation was to ramp up rate rises, then they might crash the global growth completely.
I just read a piece by ‘Dr Doom’ , Nouriel Roubini, more or less saying that stagflation (inflation and no growth) was now a dead cert. He was able to add some extra negatives that I did not know about a year ago: the Russian invasion of Ukraine and the very aggressive lockdowns in China as the government there tries to keep the country free of a major outbreak of coronavirus.
