The first words that come to mind whenever a client asks this question is “It is not about timing the market, but it is about time in the market.” Having said that, in 2020 we saw markets reaching record highs in a highly uncertain world and we are cognisant of the fact that both elements have contributed to investor nervousness. At Anchor, our role is to help you navigate the turbulent sea of circumstances and events which move markets and, as such, to have a specific strategy and asset allocation in place, which we then align with your specific investment goals.
The most discussed component of what has been driving global markets since 2020 is money supply growth. Stimulus injections and measures by major governments around the world, especially the US Federal Reserve, has led to the fastest and largest money supply growth on record and has also brought most markets back to their pre-COVID levels. However, the world was already evolving and those trends that were underway before the pandemic have merely accelerated. Technology is the way of the future and this new age of innovation and technology has enabled businesses to create enormous opportunities. In our view, the present is a very exciting time to be an investor, especially a stock picker. This leads us to our next point.
It is always important to put the performance of markets in context. Depending on which index you watch (we will use the MSCI World as an example), the index level might be back to where it was in January 2020. However, it is also important to disseminate the composition of that index to determine how to position client portfolios. Valuations might be high, but the valuations of the various sectors of the market vary greatly.
We are in an explosive period of new ideas and innovation, which are leading to new business formation. At Anchor, we marry our analysis-driven, fundamental investment approach with our ability to think in an agile and creative manner to focus on where the best investment opportunities can be found.
Whilst markets have done well and many investors are now experiencing the fear of having missed out on the bounce, there are still numerous attractive investment opportunities out there. Even where equities are already expensive, we believe that they will possibly become even more expensive, so there is always room for more growth. Our mantra is there is no alternative (TINA) to investing in offshore markets
Speaking to this, our view is that the real risk is not in market volatility but rather in your money not growing as much as it possibly can. We remain positive on global equities and domestic bonds and we encourage you to get in touch with one of our investment professionals to help you create a suitable investment portfolio, built around your unique requirements. Let us help you navigate the choices available, whilst helping you become hopeful for the future.