Comment and opinion for retail investors in the UK
As the section heading suggests, this month’s commentary is going to be something of a pot pourri of news and comment.
I hope at least one or two snippets will help my readership to better understand what is happening in markers, what that signifies and how to make any minor course adjustment in your portfolio planning journey.
NB – I am on holiday for 2 weeks from September 18th, so the next post you see will be the October Watching Brief, which may be a few days late.
One of the most common topics that comes up in my converstations with subscribers is how to judge the right time to buy or sell. It is a perennial worry for investors because it always feels like one could have done better after the fateful decision has been made!
In truth, no-one is ever going to be able to buy at the lowest price or sell at the highest other than by luck. When I started in the investing business, I was told that if you got your transaction within 10% of the most advantageous price more often than not, you were either very lucky or pretty experienced/skilled.
My ‘we’re past the worst’ assessment at the start of last month looks to have been woefully optimistic on the basis of August’s stock market returns, although as I begin to write this with a few days of the month remaining, valuations are heading back up.
What is rather odd is that there has not really been any new macro economic news to deflate the optimism that prevailed in July but indices are showing that markets more or less gave back the gains they made then. It is just possible that investors in the important US markets simply decided to book gains ahead of the usual ‘back to work’ re-assessment that usually happens in September before the always important and generally risky run to the year end. But maybe there are other reasons?
Looking at my 3 personal portfolios (UK Sterling SIPP, UK Sterling collectives and Euro collectives) I note a noticeable flattening out of what had been a longish mostly downwards line on the valuation over time graph.
In fact, July was a month of modest gains overall, with the best results in the Euro portfolio, suggesting that over the month Sterling may have appreciated a tad against the currencies underlying the largest holdings I have in my UK pots.
I cannot of course guarantee it, but my feeling is that early Summer 2023 may be the inflection point when the bear market that started some time in late Autumn 2021 and which has had stuttering false recoveries comes to an end.
There are plenty of predictions of better economic growth and ‘soft landings’ and unsurprisingly (at least to me), corporate profits are in the main on the up, thanks to the consumer being suckered with price increases, quietly approved of by governments and central banks whether justified or not!
I could not think of anything connected with markets and investing in the current climate to write about this week. I have plenty of ideas, but I have not go very far in developing them so that they would be useful to investors and worth giving up your time to reading!
I will confine this week’s post to answering two more linked questions in my June quiz.
To adapt the words from Sergeant Pepper – ‘it was 46 years ago today’ – that your then naive but optimistic scribe started work for the Halifax Building Society. Over the subsequent nearly half a century in what might loosely be called a career I progessed from cashier clerk/managment trainee through quite a few iterations of finance industry jobs to end up as your semi-retired keyboard warrior writing a blog on the internet on a warm sunny day in Lithuania, a country I suspect all of us know more about than we did in 1976!
Don’t panic – I am not going to write thousands of words about nostalgic but to you boring biographical stuff. I would only say that I have made mistakes, learned a lot and had a few successes, and that all applies to my adventures as an investor myself!
I refer to this quite large block of time so as to remind readers that when getting all stressed about your investment portfolio performance, if you ever do, you need to remember that most of us are now invested for life and hopefully that means we are going to be in the market for at least a decade or more.
That being the case, we need to always remember that markets are cyclical and we should not get overly focused on the short term. I can now say that with absolute confidence after all that water under the bridge!