Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
Investors must always confront a wall of worry. The adage is that it is ‘time in the market, not timing markets’, that truly protects and generates wealth. On the other hand, it is always hard to ignore that nagging doubt, and convince yourself to take what feels like an uncomfortable leap into the stock market despite what might seem to be clear warning signals.
In this context, the outlook today seems more than unusually uncertain. Tensions in the Middle East continue to ratchet up, politics globally has become even more polarised, and an unusual number of elections occurring in 2024 will mean the potential for significant shocks and/or shifts in economic policy and sentiment. China seems to be slowing rapidly, threatening to drag the global economy into recession, and a rumbling crisis in its property sector and a declining population raise the stakes for its unelected ruling elite.
Time to head back under the metaphorical duvet, and continue to hold those short-dated government bonds? The Gaia hypothesis, or the ancient Chinese philosophy of yin and yang may help, and we suggest that trust portfolios that exhibit self-balancing characteristics may be the answer. In the coming year it looks like having consistent inconsistency in portfolios may make plenty of sense.
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