As Trump enters the White House, will the Federal Reserve hike interest rates more aggressively in 2017? December 13, 2016 It was Ronald Reagan who warned against inflation in 1984 by describing it creeping “like a thief in the night to rob our savings, rob our earnings, and take the bread off our tables.” It is ironic then that President-elect Donald Trump, who borrowed his forebear’s campaign slogan “Make America Great Again” to win the [...]
Political shocks have been a buy signal in 2016 – why not in 2017 too? December 12, 2016 It's that time of the year for financial journalists: we are being inundated with lengthy outlook reports for the coming year. My inbox is littered with ominous warnings about how 2017 will see more uncertainty, and the overwhelming theme for the year is: it’s the politics, stupid. Given the rise in populist voting in 2016, which manifested [...]
Why this is a disqualifying offence for a value investor December 9, 2016 Some people apparently just will not be told. While past performance is no guide to the future, despite all the evidence a value-based approach outperforms over time, investors’ money is increasingly clustering in more non-value-oriented offerings – sometimes known as ‘growth’ but probably more accurately called ‘momentum’ funds. The current situation is starkly illustrated by the following [...]
TGI Friday: Private equity company reports record returns December 9, 2016 The last day of the working week is, no doubt, always a cause of celebration for the owner of TGI Fridays. But this Friday is an extra special one for Electra Private Equity, which also holds investments in the Original Bowling Company, Photobox Group and holiday parks operator Parkdean Resorts. Epiris, the manager of Electra, [...]
Bank shares and stress tests: the value investor’s verdict December 8, 2016 The Bank of England’s latest stress tests of the UK banking system attracted many column inches of space in the newspapers last week. The aim was to calculate whether these institutions would have enough capital to withstand certain grim scenarios. Moving away from some of the inflammatory headlines, it is worth looking in more detail [...]
Why do some nations hold more gold? December 7, 2016 As an asset, gold is entirely speculative. It provides no income or dividends, and has few industrial or medical applications. Investors buy it only in the confidence that humans’ peculiar and enduring fascination with the lustrous metal will ensure its value through the decades and centuries to come. Unlike other securities, its price is not dictated [...]
Marcus Brookes: How we’ve prepared for the return of inflation December 6, 2016 | City Talk Inflation was already on the rise. Now I expect the policies likely to follow in Donald Trump’s presidency will pile on further price pressure. The deflating effect of QE We have been changing our portfolios over the last year to reflect our view that inflation may be returning to the financial system. Yes, quantitative easing, [...]
No-go zone: With Matteo Renzi set to resign following his defeat in the Italian referendum, should investors stay away from the Eurozone? December 6, 2016 Italy’s referendum will not weaken the European project as much as critics hope, and Trump could help equities, says Will Railton "The vote looks to me to be more about the euro than constitutional change”, tweeted Nigel Farage shortly after the Italian polls closed on Sunday night. Eurosceptics are heralding the resounding result (a 59.1 [...]
Gold is now an accepted Sharia investment under new Islamic banking rules December 5, 2016 Gold can now be used as a commodity to back Sharia-based financial products, with rules about using the metal as an investment set out for the first time. The World Gold Council announced the new Sharia gold standard, which sets out the way in which financial institutions can apply Sharia principles in the direct physical handling [...]
The league table of countries with the most ‘caring’ investors December 2, 2016 | City Talk Europeans are less concerned about environmental issues when it comes to selecting investments than Asians or Americans, according to a major study of attitudes in 28 countries. Investors in Asia were far more likely to consider environmental concerns, particularly those in Indonesia and Thailand. Investors in China and India also ranked the importance of these [...]