Well well. It’s the 31st of March and we appear to still be in the EU. Much as I am delighted we haven’t left, this does leave some much-sought-after clarity postponed. More on this later.
The wider world
In ‘mover and shaker’ terms, what’s been going on?
- Mueller reported on Trump’s alleged collusion with Russia. Rather anticlimatically, from a London point of view.
- Trade-related noises continued to emanate from the White House. Without much clarity.
- Apple announced, erm, that it has spent $2bn on TV content. Yawn.
- And UK democracy wriggled and writhed around the incoherent fantasies of Brexit and politics combined.
From a markets point of view, this backdrop felt rather similar to January and February, and sure enough March markets felt fairly similar to January and February markets.
As a ‘no deal Brexit’ scenario looked more likely, the pound declined off recent highs. We are back to £1:$1.30. That was the major currency movement to note; in the meantime the Euro has been declining against other currencies and the AUD is bouncing around in its own electorally-driven world.
Bonds had a stronger month than normal. The logic here evades even an avid FT reader like me. I think what matters is well put by Monevator:
A quick way to be called a moron by people who know more than they understand over the past 5-10 years has been to suggest that bonds still have a place in most portfolios. A wealth-destroying crash was “obviously” imminent, you see.
But markets often move in the way that surprises commonplace assumptions, and that’s certainly been true of bonds.
Monevator’s Weekend reading: Oops, bonds did it again, 22 March 2019
This lot left March markets looking as follows:
Looking back 12 months, March saw equities return (admittedly briefly) to a positive return, leaving the Q4 20% correction very much behind us – though equities haven’t yet recovered to the heights of last summer. In the meantime bonds, which have been losing value through 2018, are now up about 5% from their Q4 nadir. A blend of both would, as so often, have stood an investor in reasonable stead.
The March market movement, weighted for my target allocation, was up 2.6% (0.75% from FX, the rest from the leveraged play on equity/fixed income). My portfolio lagged this slightly, rising ‘only’ 1.9%. But for the year to date, and indeed over 12 months, I’m up 9%. That’s despite the Q4 correction setting negative records.Read the rest of this entry »
For those of you clamouring for my February portfolio update (not), I’m not doing a full monthly report in my usual style.
I am still tracking my portfolio monthly, and I am posting the monthly figures here. February was pretty cool, and 2019 has definitely got off to a fine start.
I am continuing to do my ‘market performance, by asset class’ analysis and posting it on Twitter.
I intend to move to a quarterly rhythm for my more discursive approach. I don’t think monthly detailed posts were really adding much value. If you disagree please let me know in the comments as I will reconsider.
I had a decent break over the New Year period, and whiled away far too much time reading blogs/etc. I felt very up to date, at the time. Now of course I can’t remember what actually happened in January – proving the point of Nassim Taleb/others.
Overall I don’t think January was that notable for world politics/markets. Davos saw the usual flurry of policy-making headlines, but nothing stood out for me.
Closer to home Brexit dominated the news media, with as expected the UK government’s EU deal being rejected by a thumping majority in parliament. For some reason markets have reacted fairly favourably to these developments, I think because they appear to suggest ‘no deal’ looks very unlikely. I can’t say I am as sanguine, but in any case the pound rose to $1.33 at some point and ended the month over 2% up against the USD.
Equities recovered over half of their Q4 falls. Everywhere. Especially some tech stocks (Amazon up 13%, Facebook up 25% (!)). Even bonds rose gently. Sentiment has changed dramatically, without any particular data or hard facts to point to. Sigh.Read the rest of this entry »