How the 2020 global share slump and recovery ranks in history December 21, 2020 Stocks saw a record crash followed by a record rebound in 2020, creating some disparity between markets, as Duncan Lamont explains. The global stock market crashed at a record speed in early 2020 (Figure 1). On its way to a total decline of 34%, it clocked up a 30% loss in just 40 trading days. [...]
Global Britain: should the dramatic shift in ownership of the UK stock market be feared or cheered? November 30, 2020 How global will Britain be in future? This is a question that polarises opinion. But while the UK still needs to define its place in a post-Brexit world, its financial markets have never been more populated with foreigners. According to data from the Office for National Statistics, more than half of the UK stock market is [...]
Which stock markets look cheap as we enter the final quarter of 2020? October 23, 2020 While the virus itself hasn’t gone away, as far as financial markets are concerned, the pit of misery was back in March. At that point, a typical global market stock market portfolio had haemorrhaged around a third of its value in just six weeks. Stocks have soared As is often the case, peak despair turns [...]
The maths of why growth companies are beating value October 14, 2020 One of the side effects of low interest rates is that, because of the way that companies are valued, investors place a higher value on companies (and investment projects) which have a low probability, high payoff, a long time in the future. This helps explain why investors have been prepared to pay up for loss-making [...]
Which stock markets look ‘cheap’ after the rapid rebound? June 19, 2020 We look at how five regional markets stack up on various valuation measures. Early last week, the short answer as to which markets looked cheap was: none. Despite everything that 2020 has thrown at it, at one stage the US stock market was up for the year overall. Other markets had also regained a lot [...]
Dividend bear markets: the grizzly facts May 29, 2020 With companies around the world drastically cutting dividends, we’ve looked at 149 years of data to see what’s happened previously at such times and what investors might expect next. Dividends are expected to be slashed by 25% to 50% across the globe this year compared with 2019. This will be an unwelcome (if not entirely [...]
Downturns this deep can take a long time to recover from, financially and mentally April 16, 2020 The stock market has declined by 25% or more on 11 occasions since 1871. The median recovery time from this point has been 1.8 years. Investors who shifted to cash after the 1929 crash faced a 34-year wait to break even, compared with 15 years for those who remained invested and less than 7 years [...]
How does the stock market perform when the VIX fear gauge surges? March 3, 2020 The spread of the coronavirus has sent shock waves through global stock markets. Alongside plummeting share prices, the VIX index, the market’s so-called fear gauge, has shot up. At the time of writing, on 28 February, it stands at over 40. This is very high compared to long-term norms. Since 1990, it has averaged 19 [...]
Does the January effect really exist? February 12, 2020 January 2020 was either a good month or a bad month for investing. While 10 of the 23 countries in the MSCI World index of global developed markets generated a positive return, more than half lost money. Returns varied between +6.1% (Portugal) and -5.0% (Austria). Past Performance is not a guide to future performance and [...]
Which stock markets are “cheap” entering the final quarter of 2019? October 25, 2019 There are plenty of reasons why investors could justifiably feel pessimistic about the future, but stock market valuations are not one of them. In 2019 the global economy has gone into a marked slowdown. US-China relations have remained tense. Drones have attacked oil infrastructure in the Middle East. Global corporate earnings growth has collapsed towards [...]
