With monetary policy returning to what could best be described as normal settings, investors need to adapt to the changing circumstances, writes Wattle Partners principal Drew Meredith. It’s time to move away from risky growth assets and stop building portfolios for a ‘zero-rate’ environment.
It is striking how little little yield premium equities are offering over the official interest rate at them moment, says Ruffer’s Steve Russell. Investors may be tempted, but he warns that a cautious road may suit for the period ahead.
Fear of an impending recession in the US has been hashed out for more than 18 months now, says Francis Gannon. The reasons are myriad, but not enough people are talking about what shape a recovery would take and how investors should position themselves.
Systemic risk is difficult for investors to grasp because it’s no big deal – until it is. And unless investors adopt a “vastly different” mindset about pricing, it’s going to get a lot worse.
Like diversifying amongst growth assets, diversification of defensive strategies provides more robust portfolio outcomes. Fundlab’s Michael Armitage highlights recent performance in various defensive alternatives.
If consumer confidence remains low, it’s likely businesses conditions will also deteriorate to reflect an economy facing rising rates, soaring inflation and falling house prices.
More and more companies are actively pledging to go carbon neutral by signing either the UN’s Climate Neutral Now pledge or the Net-Zero Carbon by 2040 pledge. Some heavy hitters have already signed up.
Following the reopening of global markets post-Covid, there was a sudden change in macro-economic conditions caused by massive stimulus spending and supply constraints. Central bankers were caught asleep at the wheel, but are now starting to talk tough.
By following a simple practice known as dollar-cost averaging to buy shares or managed funds, investors can build holdings in assets in a non-emotional and disciplined way.