Insights

Monthly Outlook - October 2022

Since April of this year, we have been convinced that the global economy has entered a synchronised slowdown and that this will ultimately take the sting out of inflation and pressure off higher prices. Subsequent economic data has only reinforced this view, and it should therefore come as no surprise that we stick by our view and are now even more convinced that our view will prove correct.

Monthly Outlook - September 2022

As an active manager, our overriding goal is to beat the market return. Indeed, the holy grail is to beat the market return but with less price volatility than the market. For some months, we have adopted a non-consensus view. We believe the U.S. and global economy will weaken quickly, vanquishing the Federal Reserve's latitude to hike interest rates aggressively. In our opinion, it is only a matter of a few months before significant economic weakness forces the Federal Reserve to go on hold indefinitely.

Monthly Outlook - August 2022

As investors, we know uncertainty creates price volatility. When we have more than one possible investment outcome, we get greater price volatility as the market tries to price in the probability of these various outcomes and the implications for markets. One way of dealing with this uncertainty is to adjust your investment timeframe. Generally, if we consider complex questions over a longer timeframe, we can narrow the number of probable outcomes and sometimes almost eliminate the uncertainty.

Monthly Outlook - July 2022

Some of the hardest decisions in life are those defined by dilemmic choices. The U.S. Federal Reserve Bank, joined by a plethora of other central banks across the globe, are now deciding whether they should risk crashing their economies through tighter monetary policy, or allow inflation to possibly reek even greater economic havoc over time if left unchecked. This choice has been primarily forced on central banks by the inexorable rise of demand pull inflation and exacerbated by supply-push inflation, the origins of which both are found in the global pandemic.

Monthly Outlook - June 2022

It can be argued that markets are always in a state of anticipation, at any point pricing how the distilled wisdom of the investment masses see the future development of economic growth or inflation and their associated impact on corporate earnings. We are now at one of those critical junctures - will the inevitable monetary tightening needed by the Federal Reserve Bank to tame inflation force the U.S. economy into recession and, if so, how will the market price that risk?

Monthly Outlook - May 2022

It is no exaggeration to say that we are going through an incredibly complex and uncertain macroeconomic environment, which has arguably been created by fiscal and monetary policy responses to a confluence of exogenous shocks in recent years, namely the global pandemic and more recently war in Ukraine.