As the wonderful Nessa would say, this is an update on “What’s Occurring.”
Portfolios
The portfolios have been stellar since the start of 2012 with the returns on the more adventurous being just shy of 10 % in under 2 months.
You should note that past performance is no guide to future performance and investments can fall as well as rise.
Why?
This is in the main the perceived risk of a full and disorderly Greek default and subsequent banking crisis having receded.
As mentioned at the beginning of the year the ECB’s (no really this is not QE!) LTRO which allows Euro banks to borrow at 1% fixed over 3 years has been a huge positive, the banks have a second chance next week to tap this facility and it would not be a surprise to see another 1 trillion accessed.
Greece
The deal has been done and the pantomime has gone into hibernation for a while but it will be back.
Greece is broken, the fix is not a permanent fix it’s a stay of execution. The situation is akin to a boat about to sink, some water has been bailed out but the hole is still there and it will refill.
The aim one suspects has not been to save Greece but rather to give time to tow it to a place where it can sink without consequential damage to the greater Euro environment.
To believe that the Latin temperament of the Greek population will put up long term with subsistence rations and hardship is to believe that Arsenal can overturn AC Milan in the second leg at the Emirates, nice to dream, but not going to happen?
Oil
A big potential headwind is the rising oil price and the fears surrounding the potential for an Israeli attack on Iran’s nuclear installations.
The reality is that the world in a dangerous and uncertain place has always been so and always will be.
If oil rises back to the $150 a barrel figure this will constrain economic growth, we wait, we watch, we cross body parts! and hope for the best.
LWM
The LWM office is currently a hive of activity, with the focus being on the creation of the 2012 portfolios and the rebalancing of these in July.
We will be changing how we manage the process this year with recommendation being made in May with client authorities being requested to be received back by end of June for the rebalance in July.
This should allow all the clients to have time to digest and review the recommendation and enable us to complete most or all switches at the same date (July 1st).
As always please don’t hesitate to contact us with any queries or concerns.
As a final note please go on to charity section of the website.
We have selected 3 charities to support, Nicola is finalising hers next week, she is meeting with the head of an organisation which supplies wheel chairs internationally, this is close to her heart as her brother is a wheel chair user.
I sign off with a thought from George Carlin,
“The future will soon be a thing of the past.”
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.