Below is an excellent article we came across as a part of our regular reading and research into the world of investing, portfolio management and investment psychology.

It is of tremendous current relevance to anyone with an investment portfolio; or those sitting in cash and considering their timing.

2018 started with a boom. Then we had a mini correction. Volatility has returned. Apparent risks are everywhere. Wage pressures, resurgent inflation and increased interest rates are a possibility. Risk may be mispriced. Assets appear expensive. Russia is aggressive. China is focused. The West, uncertain: and government debt hangs over all like a Sword of Damocles.

Surely, this is no time to invest?

On the other hand, we observe stronger growth in Europe and Japan; sustained and improving growth in India, China, and the other emerging markets; continuing strong demand for commodities, good company results; and this comment from the editorial in last weeks Australian Financial Review:

“Trumps tax cut breeds powerful new optimism”

“In just two months, President Donald Trump’s business tax cut has gone from a policy many thought would never happen, to an effect on the US economy on a scale and speed thats taken even it’s backers by surprise.”

A further point from the article is the challenge of drawing a direct link between positive or negative events in the world and positive or negative returns in the stock market.


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