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at 1:35 pm on April 16, 2021 | 0 comments
March was a month for value stocks to shine. Global markets boomed, up 5% and Australian markets rose 2.4%. We had positioned our portfolios for a rise in bond yields and a rotation to value stocks and so our portfolios outperformed benchmarks. Our asset allocation portfolios all rose as well, our growth portfolio the best, rising 3.7%.
Is any news good news?
The stock market tends to be driven by narrative. For much of last year, the narrative was that
bad news was good news. Bad economic news meant bond yields fell and inflation expectations cratered. However, it also meant more central bank intervention. Growth stocks boomed. In a time of no growth, any stock that did exhibit six months of growth would “therefore” grow forever. Even better if the stock didn’t make any profit! A lower bond yield meant investors could pay more for those stocks. In the land of the blind, the one
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at 1:59 pm on December 24, 2020 | 1 comment
November saw equity market returns surge on the back of US election result clarity and positive news from a trifecta of COVID19 vaccine results. Markets broke many global records and the US equity indices hit new all-time highs as the vaccines fuelled the rotation into cyclical stocks and regions as well as providing a boost for downtrodden Value stocks.
Six months ago we expressed that the most likely reason for us to miss the upside is if capitalism was successfully suspended, companies and individuals were prevented from going bankrupt and government/central bank stimulus exceeded the hole left by the pandemic.