20th October 2020
Quilter Cheviot: Diary of a Fund Manager – Tilting at Windmills
This week’s Diary is all about the three issues that are dominating the investment agenda at the moment; US politics, Brexit and the virus. Certainty is getting closer for at least for two of these and possibly all.
Confidence took a step back last week with shares and gold drifting lower, whilst bonds and the US dollar moved higher. Awaiting events can be hard work. In the background the company results season is proceeding as expected with earnings down by a bit less than forecast. Less happily Argentina and Zambia are defaulting on their debts, passenger volumes through Singapore Changi Airport are down 98% compared to last year and WeWork is offering rent reductions of up to 50%. There will be no miracle cures for a recession as deep as this one, but growing immunity to bad news wouldn’t be a complete surprise. For investors with a longer time horizon there is a recognition that earning a return involves taking calculated risks. Over the last ten years inflation has outperformed cash on deposit including interest, but before tax by nearly 30%. Short-term certainty comes at a heavy price.
You need to be logged in to comment on this article