If you want to figure out what’s likely to happen in the next eight months, a good start is to try to understand what’s been happening over the last eight years – since the collapse of Lehman and the beginning of the Global Financial Crisis. Understanding what a portfolio should look like to cope with whatever the next few months hold… well, that’s a big question, deserving of a very big roundabout answer.
Unlike many market commentators, I’m not given to predicting the end of the world. One of the things I’ve noticed over my 30 years in markets is that they always over-react and over-anticipate. The trick is stripping out the noise to predict exactly when to play them. A good example was in the immediate wake of the Brexit vote when stocks tumbled. It was the perfect moment to step in and buy.
In fact, I am moderately positive. I even expect we might see some resurgence in global growth in the coming months, but I’m cautious as to how sustainable it can be. What the markets really need is normalisation – and as the recent Bank of England panicked rate cut highlights, there is little sign of that happening.
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