News this past week:
- Oil prices climb around 5% last week
- Volatility makes a comeback moving to 10.9 on the VIX index
- Global equities trading near record highs
- Technology stocks under pressure with continued sell offs
- Central banks adopt a hawkish tone around fiscal tightening
James Klempster (CFA) of Momentum Global Investment Management shares his view:
As today marks the start of a fortnight’s tennis at the Wimbledon championship, it seems apt to look at parallels we can draw between the championship and investing.
The surface changes – you need to adapt your game – Wimbledon’s grass is a living surface and as a result it changes substantially over the course of the tournament. The ball in early matches will skid more whereas by the end of the tournament the ground is firmer and the ball bounces more. A player who is unable to adapt to these incremental changes as the tournament progresses will not win. While markets are not alive, they are always evolving and an investment manager who does not adapt their approach in the face of an ever changing landscape will likely be unable to achieve long term, sustainable returns. While we actively seek out investment managers who have a clear philosophy and process that they do not waver from, the application of subtle details must have sufficient flexibility and pragmatism built in to ensure that a manager is not caught out by evolving conditions.