In the last quarter, the US stock market rose by 9.6% significantly outperforming non-US markets. Outside the US, the best performance came from the Japanese equity market up 3.3% whereas the UK, the Chinese and European ex UK equity markets were down 0.2%, 1.1% and 4.1% respectively. The last quarter of 2024 saw an...
We have been talking for some while in our quarterly valuation letters about limiting exposure to expensive equity themes, such as large cap US technology companies, and the importance of broad diversification in underlying equity exposure. Movements in equity prices on Monday this week are a good example of the extent to which prices...
Stock markets continued to rally in the second quarter led by the US market. The S&P 500 rose by 4.21% to reach a historical high of 5,460. Outside the US, UK and Emerging Markets equities also performed well, up 3.6% and 5.0% respectively in the quarter. Europe (ex UK) equity markets were performing well...
Stock markets posted positive returns in the first quarter of 2024 with the US market (S&P 500) up 12.2%, the Japanese market up 12.0% and Europe ex UK up 6.8%. The market rally in the US was initially driven by enthusiasm for businesses expected to benefit from the rapid growth in Artificial Intelligence (AI)...
Stock and bond markets finished the year on a high with all main asset classes posting strong returns in the last quarter of 2023. The UK aggregate bond market was up 8.25% and most equity markets rallied by 5% or more in GBP. The main factors driving financial markets continue to be the level...
The Treasury has announced that the Office of Budget Responsibility (OBR) will produce a report on the state of the UK Economy in time for Chancellor Jeremy Hunt to present his Autumn Statement on Wednesday 22 November. Last year the Chancellor announced a number of significant changes, reversing many of the proposals in the...
Anchoring is a cognitive bias that describes a reasoning flaw, of relying heavily on an initial piece of information (the anchor). Subsequent decision making and judgements are made with a bias towards interpreting other information around the anchor. Why does it matter? This bias can result in investors making poor investment decisions. A pessimistic...
Confirmation bias is when individuals have an unconscious tendency to look for information that supports their pre-existing beliefs. They then ignore or discount information that opposes those beliefs. Why does it matter? Confirmation bias can lead investors to deliberately search for information that validates their investment choices while neglecting information that contradicts their decisions....
Recency bias, (also known as availability bias), is when people give increased weight to more recent events, often ignoring information gathered over a longer time period. Why does it matter? Recency bias can affect investor decision making, and is often based on emotion rather than an informed decision. It can manifest in herd like...
In the first quarter of 2023, it was anticipated that planned interest rate rises in the US, UK & Europe would be sufficient to apply downward pressure on inflation. This scenario played out in the first few months of the year with headline US Consumer Price Inflation (CPI) falling from 6.4%pa in January to...