Especially those it's meant to protect
A deflationary bust is unlikely
The sector should hold up well
Each dot in this chart shows the return of UK defensive sectors during each of the past three economic recessions (above zero on the vertical axis is an outperformance versus the overall market, and the further to the right on the horizontal axis the more expensive). Read more on why we think now is a good time to move in to less economically sensitive sectors in ‘A solid defence’, one of the articles in our latest InvestmentInsights.
Just like other life-transforming technologies of the past, today’s tech giants are reaching maturity — that inevitable transformation from fresh young face of innovation to overgrown, mistrusted hulk. Their share prices fell amid reports that US antitrust bodies would be taking a closer look at their competitive practices for possible violations. We don’t think a bust-up is imminent but further volatility is likely for the big US tech firms in the near term.
Put crudely, the job of an active investor is to buy low and sell high. Identifying companies and markets that are ‘cheap’ (attractive) and ‘expensive’ (to be avoided) is commonly done using PE ratios, the price divided by the underlying annual earnings for that company or market. But in all but a few specific situations, when it comes to choosing one investment over another, it’s often more hindrance than help, especially over shorter time periods.
No end in sight.