Category: Investment returns

It’s the end of the second quarter.  That means it’s time for my usual monthly portfolio performance along with a quarterly review of how 2017 is progressing.

June’s news was dominated by the UK’s general election.  To my mind the electorate called it about right.  Under the UK’s first-past-the-post constituency system no voters have a say on the overall leadership, but nonetheless the overall outcome often reflects the wider mood of the nation with uncanny fidelity.  That’s what seemed to happen here: the Tories were badly led down by their leader, and Corbyn’s Labour offered a genuine and, to many, welcome alternative.  Yet at the end of the day the Tories remain in power, with an extremely short leash and an exploding collar.

The other news in June, which if you blinked you might have missed it, was the central banks publicly stuttering about the next policy move.  This unsettled UK and USA markets noticably, but it seems to have lasted less than a week.  From the point of view of my process however this was material; the pound gained about 3% culminating in it reaching $1.32 at exactly the end of the month (see graph).  Even as I write this, a few days later, the pound has reverted – but as I took my portfolio snapshot on 30 June my quarter-end numbers were pretty different.

Even a week before the end of June I was having a positive month.  But thanks to the pound blipping upwards at the last minute, and most of my portfolio being overseas at this point, I recorded a negative month. If the pound remains at the level it’s already returned to, then I am highly likely to post a positive July.

Continue reading “June ’17/Q2 progress: Coalition of chaos” →

The punning opportunities last month are almost behind us.

In fact election polls have suggested that even May might be behind us. The Prime Minister that is. If she ends up with a reduced majority, or even just a marginally higher majority, then she’ll have the Tory attack dogs at her heels in no time.

The big news in geo politics was Macron winning the French Presidential election. Markets had mostly priced this in, but the Euro climbed slightly and the Eurozone equity markets rose over 2% too.  Over two months a Brit investing GBP in Eurozone equities has returned almost 10%, including currency movements.

In the meantime, with Labour’s goalkeeper being almost absent from the pitch, Theresa ‘week and wobbly’ May has suddenly looked like she could even miss an open goal. Markets have marked the pound down.  For FTSE-100 this has been a bonus, as it has heavy exposure to the Eurozone, so FTSE-100 is up 4.4% on the month, reaching record highs.

In other news Australian equities continued their slide. And Fixed Income had a slow and steady month – as it often does.

Continue reading “May 2017: Markets voting against the UK” →

I returned to London from my Easter break to the surprise announcement that Theresa May has called a general election on June 8th.  Normally I love elections and am a news junkie about them. Personally I think the PM has missed an opportunity to lance the Scottish nationalist boil by calling a simultaneous #indyref2.  So instead of that excitement, I find myself agreeing with piece in The Sunday Times today arguing that for once a foreign election, in France, is more exciting than the anticipated Tory landslide in the UK’s general election in June.

Certainly Macron’s win in the first round of the French election lifted European stocks considerably. The European index I use as my proxy for ‘international (i.e. non UK/US/Oz) equities’ rose 3.5% in April, well ahead of the English-speaking stock markets.  While we can’t ignore the prospect of a Le Pen win, it doesn’t appear likely from opinion polls. Much as people are knocking pollsters right now the only result they got wildly wrong in the last few years was the 2015 UK General Election result (where First Past the Post makes predictions particularly tricky). So most likely European markets are going to get better rather than worse.

The other big news in the markets for Brits was the jump in the pound, attributed to the prospect of ‘stronger and stabler’ UK leadership post the general election. Forex markets clearly haven’t clocked that the European leaders who do best in EU negotiations are those with credible domestic oppositions to appease, not those with autocratic majorities. In any case, the pound is still below $1.30 so the Brexit Brainfart hasn’t blown away yet.  But the pound rose against the whole basket, particularly the AUD (+5.8%). This led to FTSE, a foreign-dominated stock market, dropping about 1%.

Continue reading “April 2017: elections & returns” →