Published on: January 31, 2020

Hello, once again, to another end-of-the-week celebration, in the form of my thrown together musings.  There is plenty to furnish this page with, so how about we just get cracked on?  Welcome to this week’s News, Views and Truths.

The market euphoria that greeted the start of 2020 swiftly abated this week as global markets have come to terms with the viral outbreak in China, highlighting once again that markets go up like an escalator and down like an elevator.

With the Coronavirus now declared as a public health emergency by the World Health Authority, investors have reacted with caution to the news, with the Hong Kong-based Hang Seng Index falling 6% this week.  To put this into further context, the Asian markets were closed Monday and Tuesday this week due to the Chinese New Year.

However, there are those that see this as simply a buying opportunity.  Buying the dips and selling the rips.

Analysts at Bank of America have stated that, prior to this newest of downturns, investors had found it becoming more and more difficult to enter the market with new capital, due to all-time highs.  Pullbacks like this can offer investors much more attractive entry points.  In a note written this week, they state:

Why buy the dip?  A 3% drawdown cleared some positioning froth.  Why sell the rip? Tech most overbought since dot-com bubble.

However, as the chart above shows, a properly diversified portfolio will offer capital preservation during periods of equity downturns.  The Gilt Index has risen 3.27% since the start of the year and acted in exactly the manner that investors should expect.  We shall naturally keep an eye on how this story develops in specific reference to the Three Counties portfolios.

Moving on from a rather negative story to another much more joyous event…

This, ladies and gentlemen, is it.  Well, not totally it, but the end of it.  Or is it the start of the end?  Or the end of the start?

Anyway… 11pm tonight, sadly without Big Ben’s bongs, we, the United Kingdom of Great Britain and Northern Ireland, will leave the European Union and strike a course.  Where that course leads us, who knows.  But we are all on it together.

Whether you voted to leave or remain, it’s over.  It is now time to put the last 3 years behind us and grasp the opportunity will both hands.

So tonight, I shall be raising a glass; not to the past, but to the future.  I hope you will join me.

(Please don’t turn up to my home.  This is not an invite; it’s rhetorical).

And as a backdrop to tonight’s historical event, a playlist.  I hope you all have a smashing weekend (I haven’t even mentioned the start of the 6 Nations!) and I shall see you all next week.


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