POLITICAL AND ECONOMIC INSIGHT : Shout loudly and wave your stick around
TAM Asset Management | June 2018
President Theodore Roosevelt once said, in relation to US foreign diplomacy, "Speak softly and carry a big stick." It seems President Trump has re-tasked that phrase to read, "Shout loudly (over Twitter) and wave your stick around as often as possible."
The definition of a "Pyrrhic victory" is essentially where the pursuit of victory inflicts such a devastating toll on the victor, that it eliminates any benefit of being the victor. In modern history the phrase is usually reserved for nuclear war, wherein the last nation standing would be the victor, but standing in a radioactive wasteland, which negates the victory...
Are trade wars and a US recession really on the cards?
Canaccord Genuity: Investment Market Update | March/April 2018
Against this backdrop, Michel Perera, Chief Investment Officer provides an update.
Very little has fundamentally changed since the beginning of the year yet the markets are behaving as if we have moved to a different phase in the economic cycle. The reasons are simple: a potential trade war and concerns that we are nearing the end of one of the longest bull markets on record. These are both hampering confidence and the recent technical market correction (market fall) has spawned some fundamental worries...
Financial Times: The unique advantage of equity investment
Fundsmith Equity Fund | 20 April 2017
Investment in stocks and shares - equities - has a unique advantage over other asset classes which in my experience is rarely understood and almost never discussed. Equities can compound in value in a way that investments in other asset classes, such as bonds and real estate, cannot.
The reason for this is quite simple: companies retain a portion of the profits they generate to reinvest in the business...
Five common mistakes UK expats make about domicile and tax
Old Mutual International | September 2017
Research from Old Mutual International has uncovered some crucial misunderstandings among British expats when it comes to their domicile status and tax position. These misunderstandings could leave them and their loved ones financially exposed, and could even land them in trouble with HMRC if they are not paying the correct UK taxes.
Watching and waiting
Canaccord Genuity: Investment Market Update | February/March 2017
On a global basis, financial markets still offer a seemingly positive story - the outlook for growth is on an upward trajectory and equity markets are reaching new highs. Fortunately, for investors, none of the fireworks in the political arena over the past 12 months have really seeped into the overall tone of financial markets.
However, there's a noticeable absence of the 'irrational exuberance' which normally marks the top of financial markets - a sure sign that there is some nervousness around. This perhaps explains why many investors are watching and waiting.
For our clients, we are doing exactly that...
2017 - taking us to new destinations Investment
Canaccord Genuity: Investment Market Update | January/February 2017
The seismic events of 2016 - the vote for Brexit in the UK and the election of Donald
Trump in the US - have continued to cast their shadows into 2017. Equity markets
rallied after Trump's election as investors quickly became euphoric over his new progrowth
agenda. Markets didn't so much accentuate the positive, they exaggerated it.
In particular, US equities have been busy pricing in all the benefits of higher infrastructure spending, corporate and personal tax reform, reductions in regulation and a much more pro-business administration (according to The Economist, one in seven of Trump's cabinet-level appointees are dollar billionaires)....
New horizons - where will 2017 take us?
Canaccord Genuity: News & Views Q1 | 2017
2016 has been an extraordinary year. Few would have predicted last January that we would be rolling into 2017 with Trump in the White House and the UK planning to leave Europe all with equity markets seemingly taking it in their stride - at the time of writing, the FTSE 100 is at over 6,900. Consensus, polls and forecasting have all been called into question...
The world post Trump (November/December 2016)
Yet again this year, global financial markets were left in shock following an election result which confounded pollsters. But nearly three weeks on, and as the dust settles are initial concerns giving way to cautious optimism? Although it could be argued that Trump's victory has increased longer-term financial, political and economic uncertainty, he will clearly be good for short-term US growth and therefore earnings...
The markets aren't having it (November 2016)
Tam International Investment Note
Capital is a coward. At the first sign of trouble (everyone calls it "uncertainty" these days) it bolts for the door. It's what the majority of the media and politicians warned us would happen if Trump won. It sounded plausible and all appeared to be going to their script in the small hours of last Wednesday morning when it became apparent that Trump's victory was nailed on. But the markets weren't having it...
Implications of the US election result (November 2016)
Guinness Asset Management Limited
So we have a new President of the United States, and it is Donald Trump. The polls, once again, proved to be an unreliable indicator of voting intentions. It appears that the option of change offered by Trump to a white working class population was stronger than the fear he instilled in minority voters......
1066 and all that (November 2016)
It was on an October day in Hastings that one of the most famous events in Anglo-French rivalry took place - and marked a turning point in the history of England. While technically a Norman rather than French conquest, the effects of 1066 can still be felt today in terms of landscape, language and culture.....
A season for change? Autumn leaves markets faded (October 2016)
Typically, September is a difficult month for equities. It was therefore unsurprising - with most equity indices at or around all-time highs - that markets paused for breath during the month, with the recent rally losing some of its momentum. During this period, the FTSE All-Share Index moved sideways in a relatively tight 2% performance band....
Q4 Views for 2016
We meet with challenges at every stage of our lives, and life can often be unpredictable as demonstrated by the recent surprise vote for the UK to leave the European Union. The future is always uncertain. So perhaps the most important question you can ask yourself today is 'how prepared financially am I for the future?' It is well documented that a worrying majority of working-age people in the UK have vastly inadequate provision in place for their retirement - a situation that can only worsen as we continue to live longer...
Riding high under a clear blue sky (August 2016)
Tam International Investment Note
This time last year, the UK's stock market was at a similar level to today and pretty much where it had been sitting calmly for over a year. International bond and currency markets were relatively sanguine; all playing along nicely to the script written by the US Federal Reserve. Improving economic data, supportive central banks and some temporary relief from eurozone woes, courtesy of the sacrosanct European Commission holidays, added to the general feeling of a classic stock market summer daze....
Good things come to those who wait (August - September 2016)
The speed at which financial markets have rallied recently - largely
in response to the latest round of central bank stimulus - means that
most markets require a period of consolidation, and possible setback,
before we take further opportunity to reduce our modest equity underweight.
The rally that we have enjoyed over the last few weeks has also partially occurred because Brexit has become something of a short-term, non-event, as it is looking increasingly likely that the beginning of negotiations is well down the road.
However, there seems to be a degree of complacency concerning the UK economy at present and we must bear in mind that it is too early for adverse post-Brexit sentiment to show up in most economic data. There is, therefore, the potential for a few nasty economic surprises in the months ahead and a real chance that the UK could return to recession next year...
Brexit - the aftermath (July - August 2016)
As we continue to assess the economic climate following Brexit, it's clear we're not through the storm just yet. In our view, the impact of Brexit will be to reduce economic growth in the UK and Europe, push back expectations for interest rate rises in the US and the UK (and even set them into reverse in the UK), dampen corporate profits in constant currency and create an extended period of uncertainty, which, as we all know, markets loathe. However, with every cloud there is a silver lining - and from a wider capital markets perspective, this is driven by the liquidity central banks often provide during such periods, or at least expectations thereof....
Expecting the unexpected (July 2016)
Tam International Investment Note
"The one thing we can all be sure about in politics is you are as well to expect the unexpected." - Charles Kennedy
When Michael Gove, co-con venor of Vote Leave, was woken in the small hours by his wife to be informed that the UK had voted to leave the EU, he apparently said "Gosh. I suppose I had better get up". Indeed he did. To say the result was unexpected is as understated as his waking words. The last bookies odds on 23rd June put the odds on leaving at 6/1 which was double the odds the day before. Remain looked nailed on at 1/10 which, to put it in perspective was the same odds as England were to beat Iceland for a place in the Euro 2016 quarter final three days later...
Breaking up is hard to do (June 2016)
A United Kingdom this most certainly is not. Contrary to the bookmakers' odds and the suspicion of many that while the opinion polls might have pointed to a Brexit outcome, this underplayed a groundswell of support for maintaining the status quo, the Leave campaign has persuaded a majority that the UK's best interests are served outside of the EU.
Regardless of the rights or wrongs, the results are in and we must now focus on where next for the UK...