News / Views

Investment Notes

Follow our regular updates to stay up-to-date with current financial planning and investment issues. We regularly publish press clippings, articles and thinkpieces that we think might be of interest to our clients.

Healthy banks are a critical ingredient in the economic infrastructure that underpins growth and equity market performance. Today the healthiest banks are found in Japan and Asia and the weakest in the Eurozone. Thus banks in Japan and Asia look best placed to support growth in their economies, whilst Eurozone banks appear worst-placed.

Syria is a secular state, but the religious breakdown of the Syrian population is approximately 74% Sunni Muslims, 16% Shia Muslims, 10% Christian (source – CIA World Factbook). However, the al- Assad family which has ruled Syria since 1971 are Alawites (one of the branches of Shia Islam), and government positions are mainly held by Alawites.

Since the drama of the Italian election in the spring, European politics have been remarkably quiet. This has been by design – the countries who would like Germany to provide money or ease policy to support their beleaguered economies have understood that it is very important not to scare the German voters ahead of their general election on September 22.

On May 30 we published “UK Economy – Green Shoots” anticipating the improvement in the economy that has become clearer to see in the last few months. Data for the second quarter showed growth of 0.6%, a very healthy pace, house prices all over the country have begun to pick up, and shorter term sentiment indicators are showing a clear improvement in confidence across all sectors of the economy. This note examines the sustainability of the recovery.

Returns from the UK commercial real estate market have arrived at a critical inflection point. A year ago, the average rental yield on commercial property across all regions and types of property was 6% per annum. However, capital values were declining by about 0.5% per month, giving a zero total return to investors.

In 2009, in the face of a global economic crisis, the major economies of the world came together and acted in concert to ease monetary policy aggressively. Together with fiscal stimulus in the US and China, these policies helped to prevent the world from slipping into depression.

Ben Bernanke’s discussion of the Fed’s policy intentions in the press conference following the Federal Reserve meeting on June 19 was a shock to markets, with all asset classes around the world falling sharply in response.

The end of bear markets are periods when investors are delighted that they do not own a certain type of asset. This usually means that the performance has been very poor for a long period of time, and for reasons that most investors believe will persist.

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