Today marks the end of the silly season. The managerial class are ending their holidays and heading back to London for some work. After a nice break and a summer with no major catastrophes in it, they may even be refreshed.
The newspapers can pack away their silly season reporters and stories and file those for release next year. Instead their own real political and business reporters are back and up for some work.
But back to what? The markets have been on a great run and it remains to be seen whether this is a bull run or a bear market rally. Many in the City seem to think it is the latter and are preparing their hard hats for a storm in September and October. On balance, I think they are right.
None of the economic news has been good, especially for the UK, all summer. All it has been is not utterly desultory and this is not the same as good.
So here we are, starting the Scary season of September and October (this occurs every year because many bonds and long-dated securities are reviewed at this time, a big move in or out, or to cash, can cause crashes in the stock market).
Despite all that, this time last year the world went into meltdown and events aside, this is unlikely to happen again as the situation has been stabilised. The FTSE won't fall back down to 3500, but it may well touch 4000 from its current level of nearly 5000. overall, i still expect the year to be broadly flat with the FTSE ending at 4400 odd.
It is going to be a very interesting few weeks.
8 comments:
I think I need to get my portfolio (limited though it is) looking a bit more defensive.
RE- I think that would be wise.
I'm out of everything except absolute return and total return funds a small short on RSA that I opened at 8am this morning (glad I got out the the long position last week!).
I'm going to start paying monthly into some long funds though starting October so a dip in prices over the next 6 months or so while I buy suits me fine.
are people bearish on just the UK/FTSE? or all indices? i was thinking of taking refuge in etfs where debt is lower and growth more sustainable.....
SL - that is risk averse.
ROYM - I am bearish on UK/US/China/India/Eu equitites, gold, most natuarl resources, UK and UK bonds.
ETF's after a bit of study these products don't do what they say on the tin, especially leveraged ones. I am bullish on german government bonds, the dollar and many short positions!
The article by Mark Faber at Sackers I found a bit chilling as well.
Does anyone know who is behind all these "scrap jewellery" adverts? are they separate firms or greedy banks.
Mitch - seperate firms, pawnbrokers mainly.
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