{"id":130244,"date":"2018-07-17T12:22:46","date_gmt":"2018-07-17T16:22:46","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=130244"},"modified":"2018-07-17T08:04:48","modified_gmt":"2018-07-17T12:04:48","slug":"multi-asset-portfolio-favoured-as-global-markets-hang-in-the-balance","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/07\/multi-asset-portfolio-favoured-as-global-markets-hang-in-the-balance\/","title":{"rendered":"Multi-asset portfolio favoured as global markets hang in the balance"},"content":{"rendered":"
July 17, 2018<\/div>
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By George Prior<\/strong><\/em><\/p>\n

Investors must move towards diversifying their portfolio in light of tenuous U.S.-China relations, a Brexit deal that stands on the edge of a knife, and a looming shift in global markets,\u00a0says\u00a0the world\u2019s largest independent financial advisory organization.<\/p>\n

The investment advice comes as the VIX index \u2013 also known as the \u2018fear-gauge\u2019 \u2013 indicates that stock market sentiment on the S&P500 has improved slightly, though investors remain torn and uncertain, according to Tom Elliott, deVere Group\u2019s International Investment Strategist.<\/p>\n

Mr Elliott outlines two possible scenarios moving forward, one bullish and one bearish,\u00a0in relation\u00a0to global stock markets.<\/p>\n

Explaining the bearish case, Tom states: \u201cA lot of disruption that be inflicted\u00a0on the global economy and capital markets should a full trade war develop between the U.S. and the rest of the world.\u201d<\/p>\n

He continues: \u201cAs a result, complex supply chains will be broken, with input prices increasing while access to overseas markets is decreasing.Manufacturing plants will have to be relocated, which would require companies to allocate capital for the cost of closing old plants and opening new ones. U.S. tariff barriers on Chinese imports have already contributed to weakness in Chinese stocks in recent months, this could yet happen to other Asian and European suppliers to U.S. companies.<\/p>

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\u201cThe 23 per cent fall in the Chinese CSI300 index \u2013 which tracks the country\u2019s 300 biggest companies \u2013\u00a0perhaps\u00a0gives a glimpse of what Western stock markets can expect should this future come to pass.\u201d<\/p>\n

Still, the deVere investment strategist notes that it\u2019s not necessarily doom and gloom, as there is a flip side to this story.<\/p>\n

Mr Elliott adds:\u00a0\u201cOn the plus side, the U.S. economy appears to be in an enviable position of relatively strong GDP growth, with estimates forecasting a 2.8 per cent growth margin this year. Increased revenues are driving corporate profit growth and not cost-cutting tactics \u2013 another strong indicator. In addition, the market data company FactSet is predicting an average S&P500 second quarter earnings growth to be in the region of 20 per cent year-on-year.\u201d<\/p>\n

\u201cMuch of the acceleration has been due to Trump\u2019s tax cuts, and the return of U.S. companies to America\u2019s jurisdiction, which has translated into higher wages in tight labour market conditions.\u201d<\/p>\n

Meanwhile, Brexit\u2019s tenuous stance doesn\u2019t dispel the atmosphere of uncertainty and volatility, says Mr Elliott.<\/p>\n

\u201cThe soft Brexit stance by cabinet ministers contained numerous contradictions within it,\u00a0in order to appease the demands of\u00a0hard-line Brexitiers.<\/p>\n

\u201cFor instance, the British government is proposing \u00a0\u00a0unlimited access to the EU market for British goods with no hard\u00a0borders, whilst at the same time asking to be able to do trade deals with countries like the U.S. How, for example, will the E.U be then able to stop American imports arriving, tariff-free, into France or the Republic of Ireland?<\/p>\n

Mr Elliott goes on to say that a soft Brexit is the most likely outcome, but recent Cabinet resignations from May\u2019s government might add more fuel to a kindling fire.<\/p>\n

He states: \u201cA soft Brexit that excludes the ability for a free trade deal with the U.S. is the most likely, with Sterling taking a boost as a consequence.<\/p>\n

\u201cHowever, the resignation of cabinet ministers Boris Johnson and David Davis could cause enough trouble to render any deal with the EU untenable. The clock to March\u2019s no-deal Brexit is ticking.\u201d<\/p>\n

As such, mitigating risk through a protective, all-encompassing, multi-asset fund is a safer bet that offers some protection against any market upsets \u2013 not least because it will contain a mixture of negative or low-correlated assets.<\/p>\n

Tom Elliott affirms that such funds should be at the heart of any investment portfolio.<\/p>\n

About:<\/em><\/strong><\/p>\n

deVere Group is one of the world\u2019s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.\u00a0 It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By George Prior Investors must move towards diversifying their portfolio in light of tenuous U.S.-China relations, a Brexit deal that stands on the edge of a knife, and a looming shift in global markets,\u00a0says\u00a0the world\u2019s largest independent financial advisory organization. The investment advice comes as the VIX index \u2013 also known as the \u2018fear-gauge\u2019 \u2013 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-130244","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/130244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=130244"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/130244\/revisions"}],"predecessor-version":[{"id":130245,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/130244\/revisions\/130245"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=130244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=130244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=130244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}