For Professional Clients only. For Information Purposes Only. Not Investment Advice.
Following on from the post of a couple of days ago, for those of you that felt some downside protection was worth having will be feeling better that those who didn't given the market drop yesterday. Similarly, it seems to have paid off to consider the US Dollar (and the DXY) as a probable recipient for the panic-stricken cash.
Should we re-visit 2008 lows or even approach them, no equity sectors will remain untouched. In the two prior bear legs, even consumer staples, utilities, health care and telcos lost significant value. So, don't think that just hiding away in 'defensives' will protect you, losing less is still losing. When equity indices go down, all equities go down with very rare exceptions. With the US veto of the Palestine statehood bid at the UN seeming likely, we would expect geo-political tension to only increase and the risk of unrest also to increase. So, that leaves us as general buyers of Gold, mindful that the next support is c.1675, with major support and buying levels of interest around 1500. We are also buyers of the DXY with a longer term view.
The 'defensive' equity holdings referenced above are useful places to be invested given their income-producing characteristics, however depending on your own requirements, we would suggest that you examine the merits for your circumstances in hedging off the index downside in some way. As you know, we certainly do. We are also cautious of any highly performing assets which would be vulnerable to profit-taking in the event of sovereign-level margin calls and cash raising measures.
Furthermore, there seems to be no rush to jump naked into these sectors given the shabby near term outlook for the G7 main indices, so by all means drip-feed. Our corporate bond duration remains relatively short, approximately 2 years. Strategically, we remain general sellers of EUR vs GBP but there seems to be no rush on the entry levels given the swings which we see set to continue for a while yet.
Following on from the post of a couple of days ago, for those of you that felt some downside protection was worth having will be feeling better that those who didn't given the market drop yesterday. Similarly, it seems to have paid off to consider the US Dollar (and the DXY) as a probable recipient for the panic-stricken cash.
Should we re-visit 2008 lows or even approach them, no equity sectors will remain untouched. In the two prior bear legs, even consumer staples, utilities, health care and telcos lost significant value. So, don't think that just hiding away in 'defensives' will protect you, losing less is still losing. When equity indices go down, all equities go down with very rare exceptions. With the US veto of the Palestine statehood bid at the UN seeming likely, we would expect geo-political tension to only increase and the risk of unrest also to increase. So, that leaves us as general buyers of Gold, mindful that the next support is c.1675, with major support and buying levels of interest around 1500. We are also buyers of the DXY with a longer term view.
The 'defensive' equity holdings referenced above are useful places to be invested given their income-producing characteristics, however depending on your own requirements, we would suggest that you examine the merits for your circumstances in hedging off the index downside in some way. As you know, we certainly do. We are also cautious of any highly performing assets which would be vulnerable to profit-taking in the event of sovereign-level margin calls and cash raising measures.
Furthermore, there seems to be no rush to jump naked into these sectors given the shabby near term outlook for the G7 main indices, so by all means drip-feed. Our corporate bond duration remains relatively short, approximately 2 years. Strategically, we remain general sellers of EUR vs GBP but there seems to be no rush on the entry levels given the swings which we see set to continue for a while yet.
