Market Commentary

Have to be in it to win it. Should I buy or sell?

The recent economic environment has not been supportive for global equities and massive headwinds have come from growth concerns, inflation and volatility. The massive sell-off in equities is making investors ask the question – is now a bad time to buy shares, or are there opportunities to be had while others are fearful? This blog will look at the usefulness and efficiency of market timing.

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The Chorus of Criticism of Passive Investing

The Chorus of Criticism of Passive Investing

Critiques of Passive investing According to Bank of America Merrill Lynch, passive investing now accounts for 45% of all US assets (up from 25% a decade ago), with equity passive funds amounting to c.$3 trillion at present.Our attention has recently been drawn to another high-profile investor, Michael Burry (article here), who believes that Passive investing is responsible for creating (another) bubble in asset prices, comparing it to the sub-prime mortgage bubble in that “price-setting in that market was not done by fundamental security-level analysis, but by massive capital flows based on Nobel-approved models of risk that proved to be untrue.” He follows other notable investors, s…

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Is Inflation Set to Explode?

Is Inflation Set to Explode?

In March 2018 it appeared that global growth would exert pressure on interest rates, forcing the rate of inflation ever higher, making bonds a weaker investment prospect. Things have not worked out quite as market participants then might have expected.The Fed’s policy changes and quantitative tightening in 2018, combined with the high existing global debt levels snuffed out any inflationary impulse. Following the COVID-19 fuelled stockmarket crash bond yields all over the world are now 1% or less.

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