Rising Temperatures, Rising Markets.
Greetings everyone. The US FED gave the markets no reason to stop rising after announcing low interest rates and their current stimulus package would remain in place. Although it was anticipated to be a rather non-eventful meeting, investors nonetheless were still holding their breath before it took place. The Bank of England and the ECB both followed suit in announcing no changes to their stimulus packages, which left markets (mostly) unaffected. Last week the UK FTSE finished up about 0.8% , while the US S&P ended up just over 1%, and the Hong Kong Hang Seng was up 1.8% on some slightly positive data that came out initially, but more so from the statements that followed.
All in all, the numerous central bank statements have been somewhat wishy washy in an attempt to try not to disrupt the current market trends, but their actions and statements continue to walk a fine line in this regard. Their intention has always been to try and jump start enough momentum in the economy, where the markets would become so enthralled by this, that they don’t even realize the stimulus has been pulled away! It’s like teaching a child to ride a bicycle and reaching the stage at which you would take the training wheels off…. Imagine giving them a push start and running alongside them until you stop running beside them and before they’ve had a chance to realize you’ve left their side, they’re off on their own and away they go! Now, it doesn’t always happen this way, and the FED has tried this before only to see the bicycle swerve into the bushes. But they are fast approaching the need to remove the training wheels and they’re hoping that when they do, this time will be the time in which bushes are avoided and instead they make it down the road unassisted! And given they’re not even sure when to let go, or how they’ll do so to allow the economy to continue unassisted, we’ll continue sticking with the fundamentals and maintain a diversified approach.
Speaking of approach, Austen Morris Associates will have their own internal investment board meeting later this month where several of our senior advisers meet to review current market trends and client portfolios. This also provides an opportunity for attendees to express their beliefs on the markets and discuss client portfolio strategies as well as investment opportunities within the markets moving forward.
These meetings take place regularly to ensure that market trends, opportunities and investment strategies are continuously monitored and communicated. I certainly enjoy these brainstorming sessions because each individual’s ideas are taken into consideration and deliberated, and it provides another perspective on the markets to that of my own, which I believe is important. And with the collaboration of all involved, this also helps to ensure that diversity and investment strategies across the spectrum of risk profiles remain sound. Not to mention that every good strategy still needs to be evaluated as the markets will evolve and events are ever changing, which is what these sessions aim to achieve. We’ll keep you informed of the main points of discussion and highlights that result from the next investment board session towards the end of the month so do stay tuned.
On a side note of changes, the method to calculate GDP has recently been revised to include intellectual property, including things such as pharmaceutical drug patents and video production costs. Revisions to GDP do happen from time to time, and a good example was back in 1999 when it was revised to include computer software. So, after a few weeks of perpetual data, the week ahead seems lackluster data wise, and thus is not a bad time to get under the hood to see if any rebalancing could be beneficial to your portfolio at this time.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more information about Austen Morris Associates please visit our website.
Austen Morris Associates Wealth Management & Investment Team
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Rising Temperatures, Rising Markets.