I recently decided to take a trip up to the Lake District thinking that some down-time by the Lakes would be a good idea. The only problem was, everyone had the same thought as me, so the M6 on the way up resembled a car park - it took over seven hours to get there!
As I whiled away the hours, staring at the back of a white van, I realised that my unique idea to get away for the weekend wasn’t such an exclusive decision after all. As the traffic continued to back up, it dawned on me that the markets are also displaying a similar herd like mentality.
Global monetary policy loosened noticeably last month. Further stimulus from the European Central Bank, rumours of even heavier bond buying from the Bank of Japan, and a dovish US Federal Reserve have been a boon for asset prices.
My current box set addiction is Deadwood – a TV series about a gold rush in the American mid-West, with desperate men panning the streams for gold and trying to stay alive as rivals move in. They spend hours sieving stones from the river bed looking to find glints of the shiny stuff. As a fund manager in these volatile times, I can feel more than a little empathy as I try to generate positive returns in what are likely to be flat or falling markets.
It seems my pet dog has recently developed sensitivity to the markets because throughout January, he was a particularly poorly boy. While at the vet, the Australian nurse examining Monty found out I was a fund manager, so started quizzing me on the state of the share market. Trying to explain a preference for Wells Fargo over Bank of America Merrill Lynch to the tune of a whimpering animal is quite a surreal experience...
Equity markets have taken a beating over the last week, recording one of the worst starts ever to a calendar year. No doubt your clients have been in touch with you about the falls most notably in the FTSE 100 (-5.94% year to date). The woes have been exacerbated as investment banks and other analysts have been quite negative over the past 24 hours.
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