Investment Line is a regular investment bulletin produced by Mattioli Woods plc. The communication provides an update on funds, highlights some of the areas we are focusing on, and shares our thoughts on the issues of the day.
This feels like more of a bear market rally than the start of a sustained rise in markets. Opportunities will be presented for long-term investors, but caution remains the most sensible guiding principle.
The US certainly seems to have got ahead of itself and the corporate earnings season could bring a reality check. Less developed parts of the globe at an earlier stage of the outbreak may find the going very difficult from here. We are reducing Japan and Asia allocations for the most risk-averse client portfolios.
Forecasts for the UK are bleak, and we still have the negotiations with the EU to come later in the year. Hard to get excited despite the market being cheap relative to other markets.
The recent travails of markets seem to further bolster the case for a more focused approach with our preferred sectors looking like solid long-term plays.
We are using some of the high cash positions to further add to US Treasuries.
We have seen some recovery here in line with other assets, but the potential severity of the UK recession means we are reluctant to add to holdings, despite significant discounts.
A wide range of investment strategies continues to be employed to help navigate these challenging markets. Some have regained credibility but have still been hit.
Cash looks attractive and the actions of investors globally are an indication that in times of extreme stress it might be the only asset that can be trusted, short term.
Investment Line is written and edited by members of the Mattioli Woods Group investment committee and is for information purposes. It is not intended to be an invitation to buy, or act upon the comments made, and all/any investment decisions should be taken with advice, given appropriate knowledge of the investor’s circumstances. The value of investments and the income from them can go down as well as up, and you may not get back the amount invested. Past performance is not a guide to future returns.
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