The Most Hated Bull Market in History

Screen Shot 2017-11-07 at 5.55.04 AM‘Goldilocks period’ is often used to describe this period of reasonable growth, low inflation and low-interest rates which has led to excellent returns for equities and credit; i.e. ‘not too hot, not too cold’. Since the market bottom in March 2009, equity markets are up somewhere between 350% in US and 200% in UK.

Despite these good returns, this recovery has been characterised as ‘the most hated bull market in history’.

Jeromine Bertrand (CFA) of Momentum Global Investment Management, one of our UK regulated, discretionary fund managers explains what it means for investors. Click here to learn more.

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PortfolioMetrix Market Update: Asset Allocation – Eyes Forward

News-wise it was an eventful month with the UK formally triggering Article 50 to begin the process of leaving the EU, the withdrawal of Trump’s healthcare bill, the US Fed raising rates by 0.25% and the Netherland’s avoiding the election of far-right candidate Geert Wilders.

PortfolioMetrix have just completed a formal asset allocation review for all portfolios, the results of which have just been implemented in their latest rebalance. How they decide on this asset allocation is reasonably technical, which they have already covered (the perhaps infamous ‘Black Litterman’ discussion), but they did want to highlight one key element of the process: PortfolioMetrix asset allocations are forward-looking, not backward-looking. Learn more

One week until Article 50

BrexitIts just a week until Britain is expected to trigger Article 50, sterling is at a three week high, UK inflation is at its highest since 2013, leaked EU documents suggest Britain could be kicked out EU and fined £50bn.  Add to this that the Bank of England (BoE) Chief Economist Andy Haldane is postulating a base rate rise to 4.25% that could wipe out 1.5 million jobs but boost productivity in the long run.  Scotland is pushing harder for another independence vote, and the BoE predicting a further retail slowdown: all in all perhaps enough commotion to burrow yesterday’s embarrassing infighting of the Labour Party. Or perhaps not.  It seems that it doesn’t matter how old a nation’s democracy, advanced its economy or established its laws; political risk teeters when the populous lambast inequality and the public coffers are constrained by their own indebtedness.

Following Labour’s commotion yesterday, with Labour deputy leader Tom Watson clashing with shadow chancellor John McDonnell and an embarrassing parliament session feud, Jeremy Corbyn’s video address seemed a phony attempt to reassure members that the embarrassment only goes to prove that ‘spirits in the Labour party can run high’. Mercifully, attention is focused less on Labours potential disconnect and more on the impending Brexit annulment.

Prime Minister Theresa May’s ‘no deal for Britain is better than a bad deal’ is being threatened by the EU’s leaked plans for a prolonged legal battle, seeking £50bn of apparent dues, should the UK leave the EU with no deal. President of the European Council Donald Tusk promised to make ‘the process of divorce the least painful for the EU’ implying the obvious antithesis for the UK. But as difficult as the Brexit process could be, the legitimacy of the EU’s request for alimony seems tenuous and the potential damage to the EU from a go-it-alone Britain should prove a strong incentive for some sort of eventual deal.

PortfolioMetrix Market Update

pmxFebruary went by in a blur, but what a month it was. PortfolioMetrix had their best month ever in terms of new money flows as well as, when combined with market performance, their best ever month over month AUM increase. And to cap it off, just after month-end, PortfolioMetrix picked up the Citywire Wealth Manager Regional Star Award. Learn more

Inflation Is Up, Is This An Issue?

We believe that, ultimately, it’s imperative to move the debate forward with respect to what constitutes ‘risk’ to an investor. Thinking of risk purely in terms of volatility is a disservice for investors as in reality ‘risk’ is so much more than a number. One of the greatest risks that many savers are taking – often unwittingly – is the risk of having insufficient funds for a reasonable lifestyle at retirement, especially when the ravages of inflation are taken into account. Learn more

Sterling Plunges as Bank of England Cuts Interest Rates For First Time Since 2009, Pension Funding Gap Widens

BoE cuts interest ratesThe Bank of England has unveiled a fourpronged stimulus package designed to boost the economy and prevent a recession following the vote to leave the European Union.

Sterling tumbled and UK gilt yields dropped to fresh lows after the Bank surprised markets by restarting its money printing programme to buy government and corporate debt alongside the first interest rate cut in seven years.

Subsequently, the deficit of defined benefit or “final salary” pensions, which pay out an income linked to an employee’s final salary, jumped GBP70billion as a direct consequence of the decision to reduce interest rates by 0.25%.

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