Sunday nights in autumn are happy times, American football is a Badger favourite and there is a team nicknamed “The Honey Badgers”!
The only problem is that to watch a game is to endure constant advert breaks but a new option on Sky is something called the RedZone. As there are between 4 to 6 games played at the same time the RedZone simply switches between them as one or other gets exciting (the RedZone is the expression for a team which gets within 20 yards of the opposition’s end zone) the programme has no commercials and so it’s frankly fantastic.
This wonderful viewing experience is the inspiration for the blog which will be all action, no filler, no commercials!
EQUITIES
The worries of the US dominated global markets recently, firstly tapering then the debt ceiling; both are now in abeyance until Spring 2014 and money is moving back into stocks.
All things being equal expect stock prices to rise in the major world indices, emerging markets to be more buoyant as the carry trade reignites and for a generally positive end to the year.
FIXED INTEREST
The wobbles around tapering and the debt ceiling pushed yields higher but they are now falling and emerging market debt and currencies are rising in price, expect this to continue until the end of the year.
REAL ESTATE
As long as interest rates stay low with no indication they will rise, then there is a floor under property values.
The Conservatives have gone back to the 1980’s play book on how to gain re-election, privatising state assets at silly low prices and engineering a mini property boom. The Badger is amused that most people don’t realise what’s happening, and depressed that he can remember it the first time!
HOT INVESTMENTS
Areas of the market are getting very frothy:
- Social media stocks such as Facebook and Yelp
- Internet stocks such as Netflix and Salesforce
- Biotec in general
- Tesla (electric car company)
Hot money is undoubtedly playing the momentum and some stocks are trading at 100 plus P/E ratios, this very rarely ends well but the portfolios are not involved in this type of investment.
UNLOVED
The investments currently feeling no love from markets include
- Commodities
- Mining
- Russia
- China
- India
- Brazil
- Apparel retailers
- Emerging market debt and equities
CONCLUSION
There’s a lot of money in the system and it’s now emboldened to invest in risk assets until the Central Banks start to raise interest rates and neutralise accommodation (QE).
It could be a bit of a party for a time but it’s always advisable to keep the following morning in mind, after excess the resultant headache is unpleasant.
NOTE: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. This is not a recommendation to buy any product or service including any share or fund mentioned. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.