Short-Term Shifts, Long-Term Perspective
24 April 2023
To all Financial Friends and New Course Students
Just a note to keep track since our last commentaries of February and March (attached here for our new Course students).
Positive progress has been made in the last month across the range of investments held by many Financial Friends.
Gold and natural resource funds have gained over 10% just in the last month.
UK Equity funds have put on an average of more than 4% with American equities seeing gains of around 2% whilst technology funds have seen growth of over 3%.
Financial Friends most favoured global infrastructure fund has gained 2.79% whilst a typical mixed asset (textbook pattern) showed a small loss of -0.45%.
Inflation linked bonds (Index Linked Gilts) fell by -2.18% awaiting a turnaround in market conditions for recovery.
Please see the ‘outlook for inflation linked bonds’ attachment to this email.
In times of volatility, reflecting the uncertainty across the global economy, students who are profit takers will rejoice in short term gains reflected in the 10% rise of gold and natural resources should they be taking advantage of this opportunity.
The one-month figures are just a comforting way of keeping track and helpful only to see how economic conditions are affecting performance short term.
The longer-term results are of interest and a more meaningful observation although past results are no indication of future performance.
Using several of the funds chosen by Financial Friends and showing results over the past 5 years to 20/04/23
Liontrust Global Technology: +86%
JPM Natural Resources: +58%
Baillie Gifford American: 54%
iShares – Global Infrastructure: +54%
Jupiter Gold & Silver: +49%
VT Gravis UK Infrastructure:+ 28%
M&G Global Macro Bond: +12%
Sarasin Multi Asset – Strategic: +4%
*iShares- £index linked gilts: -17%
(*see attachment for outlook)
So, the above commentary keeps track of performance. There are no indicators to move away for those already holding assets such as Infrastructure, Inflation Linked Bonds, Gold and Consumer Staples holdings.
Always here for subscribers to discuss, ask questions and talk things through with information and guidance.
Go ahead and use the link below to book a time and date to talk. Always good to hear from you:
calendly.com/yourfinancialfriend
Outlook for Inflation Linked Bonds – 21/04/2023
For an explanation of the outlook for inflation linked bonds I asked stockbroker Tom Murphy for his considered view.
“Inflation linked bonds remain broadly static in value as the buy/sell market has dried up because investors are holding on to a more than 10% return on their current holdings. To see recovery, inflation needs to reduce to around 6%-7% and Bank of England base rate needs to be at the same level. This is expected to encourage holders to sell the bonds and take advantage of higher interest deposit rates. Investors would then be getting a comparable return for less risk.
As this scenario develops fund managers will be able to mark their assets to market. So then the true value of these bonds can be established. I am hopeful this will cause a sudden rise in the price and value of this asset”.
PLEASE NOTE: A financial or economic commentary like these, are written to explain, interpret or give an opinion on economic events and markets to help readers understand what’s happening and why it matters. Designed to help you make informed decisions of your own by making you aware of opportunities, risks and potential rewards in the market.
