Summer Doldrums?……..but important “Housekeeping” recommended

 

Well it is now the “Summer” and school holidays grip the markets, so we will keep it short. The old adage “sell in May and go away” appears to be holding true. What was a dynamic picture in the months of May and early June appears becalmed as virtually all markets exhibit no discernible trend.

Many times in the past, howver, we have hinted that there are probably 3 or 4 key decisions that you may need to make per year that will have a significant impact on your Clients Capital Value. Our view that one of these is imminent. The Markets are delicately balanced.

What if your chosen Manager’s recent remarks that he is “Cautiously optimistic” proves unfounded?. A change is coming. Be ready for it!

Unlike other Fundamental or “Economic” subjective views on the Market , Sinergi provide a Market Commentary which is un-biased but based in statistical evidence (see below)

Sinergi Systematic Market Analysis (Week 27)

 

 

Apart from the obvious decision to join the exodus and have a holiday, this period may be the time to do an element of housekeeping for your client portfolios. Our experience suggests that a period such as we are seeing now is usually followed by a break out and an opportunity to make key portfolio decisions for your client. This could be in the form of preserving capital or positioning for growth.

We have seen a lack of enthusiasm for equities in the last quarter and while the one we always look at as a bell-weather (FTSE 100) for the asset class appears to be falling away from 5,700 as we thought it might, the strength of the trend when compared to that of March/April is decidedly weaker.

Our Evidence-Based Proprietary Analysis-FTSE 100

Importantly, we are clear about our proprietary approach, we are NOT “Chartists” whose market analysis is limited by being very period specific. A Chartist approach is constantly undermined by a need for subjective assumptions and hindsight “lagging technical studies” like Momentum and Stochastic analysis.

We are, however, able to overlay our proprietary Analysis on a Chart providing a better visual understanding of how we see the World. Our Analysis is statistically proven and constantly back-tested to ensure its “Signal” integrity. The important difference for users as they begin to review our analysis is that any such example continues without tweaking in to real time and beyond.

Decision Time Approaching- FTSE 100 Week 27

 

Looking at other asset classes, the flight to Fixed Interest has waned more recently and may be consistent with the fact that as an asset class it is historically very expensive. Commodities have halted their recent decline following extend periods of price increases in recent years, however, we have no view on where they will go next.

Time for a bit of Housekeeping?

All of the last paragraph is falling in to the trap of applying anecdotal images to the persistent trends (or in this case more recent persistently inconsistent trends), that we see in our analysis. As we have said we don’t predict or forecast what will happen in the future but we should distinguish between this stance and being prepared for what might happen because inevitably something does happen.

Our Suggestion

Going back to the old adage, it might not be a case of closing the door and running for the sun. A bit of house keeping and looking in to your client portfolios before you leave might be worthwhile? Is there a gain to be realised or is the portfolio overexposed to a particular market or sector through your investment manager solution?

In what ever way that it suits your individual client and this is what your relationship is about. It may be worth going through a review process and taking time to document their general portfolio status. There may be no time pressure or need to realise gains or move away from over exposure to markets and sectors. With the lull at the moment it may be easier to tidy up matters rather than as a reaction to events later in the year.

 

 

 

For further imformation please contact:  keithr@sinergi.co.uk

 

Keith Reid
Keith Reid
Keith’s training as an accountant and auditor has emphasized the importance of evidence in all good decision making process. The ability to monitor management processes effectively is a key to making the most of business opportunities. Both Keith and Gerry believe that this priority for capital preservation is the common principle that sets the framework for any sound investment strategy or business model.