On traditional valuation measures, shares have remained quite highly valued and even after the most recent falls, taking into account lower earnings estimates, they are still not unusually cheap. We think this explains much of the weakness of equity markets, quite apart from the particular problems of financials, and also reduces the scope for sustained recovery from these levels.
read more Insights by Stuart FowlerA key feature of the No Monkey Business investment approach, horizon matching, has been critical to protecting clients against adverse consequences of a bear market. Failure to match investment risks to time horizons for the money creates a linkage between investment portfolios and household cash flows that can and should be avoided.
read more Insights by Stuart FowlerNo Monkey Business, is highly unusual, though not alone, in rejecting conventional bonds. When we take on new clients, it is the asset allocation choice we most often need to challenge, is easiest to change and makes the biggest difference to risk management. Where does this insight come from and why is it so powerful?
read more Insights by Stuart FowlerRetirees want to know how much they can draw from their capital to meet their lifetime spending, confident they will not spend too little or run out of money. Trustees need to know how much investment income to target so as to balance equitably the needs of income and capital beneficiaries. Divorcees want to know how much spending a clean break settlement will safely sustain. Philanthropic families want to know how much they can safely give away without risk to their own lifetime well-being, which means their own needs have to be planned first.
read more Insights by Stuart FowlerThe Nationwide house price index through June shows a decline of about 7% from the peak last autumn. This is being reported as a significant correction but viewed from the perspective of the long history of house prices relative to general inflation, it is only another small step in the market’s four-year defiance of gravity since deflated house prices first peaked relative to their long term trend. Without the oxygen of credit, prices have held up remarkably well but market psychology has changed far more than prices yet indicate. The bear market is about to begin in earnest.
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