World in Turmoil
9 December 2024
To all Financial Friends
How can we have such good news for Financial Friends investors when the world around is in such turmoil? The good news? Over the last 12 months to date you have seen gains of 49% in American equity funds. Global technology up by +42.98%, Gold and silver by +34.98%, UK equity up by +19.25%, Global infrastructure +16.88%, Multi Asset +13.67%, Active corporate bond +9.51% and Natural resources + 5.93%.
Taking the average of the 11 main asset holdings engaged by many financial friends the average return over just the last 12 months totals +17.45%. This allows for Global fixed interest, Index linked gilts and UK infrastructure dragging their heels with very low returns. The average of course is where investors held equal amounts in each of the 11 assets. Whilst others hold other assets in their choice of holdings it would have been hard for your funds not to have made a satisfactory return 12 months to date from 5th December 2023 to now.
Why This Good News?
Wars in Ukraine and the Middle East and reignited in Syria with the shadows of conflict between the bigger powers threatening far worse, why did these market assets rise so steeply. I suggest that human nature is at the root. Always eager for a quick return and the fear of missing out, investors eyes were fixed on the positive effects of defeating inflation and the hope of rapidly falling interest rates boosting the global equity market.
Inflation and interest rates have fallen yet the UK budget and the Trump effect in the USA are triggering expectation of a 'short term' uplift in these key economic factors. We stay with the hope this concern is indeed short-term.
Looking Ahead
Yes for sure, there were many undercurrents of concern and worry causing volatility along the way. The Trump effect played its part I suspect. American equities shot up by 35% in the last three months alone as Trumps likely election was anticipated by many. America first, tariffs and other factors caused the belief of a coming boom in the American economy. If America sneezes the rest of the world catches a cold. If America feels good the rest of the world glows in economic warmth - dependant of course on the uncertain effect of Trump tariffs if they come about.
I have attached the not so good news in a separate document for those who want to know. My commentaries always need to keep a balanced view and seek to look two steps ahead of the market. Here (see attached) I look at our five strategies, some of which students decided to adopt - some of course designed their own strategy exactly as that should be. Looking ahead, although through a glass darkly, how would each of the strategies respond to what may be coming down the track?
Please remember that investments fall as well as rise in value and these words and attachments are a commentary for your consideration providing information and guidance. Always good to read other commentaries from other reliable sources to build your understanding. As a subscriber to Your Financial Friend arrange a Zoom call here www.calendly.com/yourfinancialfriend for the information and guidance you need.
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.
