We're pleased to launch "Gyrations" to provide insights into risk management of an equity portfolio. This is aimed at investors wanting facts, based upon the flow of money, not endless opinions or predictions.
- We detail investor sentiment and key upcoming data released with market pricing of outcomes.
- Our investment view is that interest rates will stay low for an extended period, and stock market volatility will increase. During 2012-2016 the level of volatility was low by historical standards. Our expectation is that volatility will increase, leading to “risk-on”, “risk-off” investing market characteristics only distantly related to fundamentals.
- The “traditional” approach to investing directly in blue chip high yielding shares, or conventional income funds, leave investors fragile and exposed to falls in the value of investments. Falling interest rates and rising market volatility are ideal market conditions for risk managed equity income funds with a “hockey stick” payoff always in place. The more volatility, the more opportunities there are to capture upside and re-balance the portfolio.