GLOBAL MATTERS MONTHLY MARKET UPDATE - May 2021
Confidence in economic recovery continued to mount in May, with most data and forward indicators pointing to a period of exceptional growth underway. Confirmation from data releases and empirical evidence that this is being accompanied by a sharp rise in inflation caused some investor nervousness during the month, but dovish signals from the Federal Reserve assuaged those concerns and underpinned a continuation of the reflation trade in markets while, somewhat surprisingly, holding bond yields in check... MORE...
INVESTMENT UPDATE - HIGHER FOR LONGER
While we might be familiar with the term ‘lower for longer’ to describe interest rates, our Investment Manager has aptly titled the latest investment update ‘Higher for Longer’ as he discusses inflation which he believes might stay higher for a longer period than expected... MORE...
MONTHLY MARKET COMMENTARY - JUNE 2021
Despite another month of strong economic data, global markets went largely sideways in May. The welcomed success of the vaccine rollout in many countries is allowing for the unlocking of economies and a gradual return to normality. However, this has been partly overshadowed by a sharp pickup in inflation and a rising concern that this could lead to central banks withdrawing some of their stimulatory policies... MORE...
BIG SHOES TO FILL: RETHINKING DEFENSIVE ASSET ALLOCATIONS AFTER A 40-YEAR BULL MARKET IN TREASURY BONDS
U.S. Treasury bonds are not likely to repeat their spectacular performance as income-producing risk reducers in portfolios of the past four decades. While bonds still have an important role to play in some settings (e.g., liability hedging for retirement plans), we believe investors should look at alternatives for diversification, including inflation-protected securities, gold, defensive currencies, and stocks and option protection. However, we believe that no other asset class alone can fulfill all the functions that bonds played. We think it’s prudent for investors to consider a balanced combination of the bond alternatives we identify here... MORE...