Yes, it's those awful Coutts again. But I'll tell you the truth, dear reader(s), I don't mind them so much now. 'They're all right, boss. They send some good emails.' Yes, Voice. Like this one that came yesterday about challenges and opportunities for 2018 ...
Global Growth - We think the global manufacturing cycle is peaking about now, which raises the question: what next for the world economy and where to find value for investors. With robust consumer and investment demand, low inflation and accommodative monetary policy in most countries, we are expecting the looming slowdown to be gradual, with world growth as a whole still firm through 2018. With company earnings in the major markets likely to continue rising and no sign of US recession on the horizon, we continue to have confidence in equities, with a bias towards those regions where we see the growth cycle persisting for longer, like Europe and Japan.
But can things grow forever? That's the question. 'Fingernails do, boss.' What?! 'I've noticed you always keep your fingernails short, to play your guitar, like.' So?! 'Well, they keep growing, man, don't they?' What the hell have my fingernails got to do with the world economy?! 'Well ... probably not much.' Idiot!!!
Inflation - In our search for inflation-beating returns we favour segments of higher-yielding bonds, like financial credit (yielding over 5%) and emerging market debt, and equities, where dividend yields are solid (4.2% for the UK's FTSE 100) and earnings are growing.
Okay. Fair enough. Or maybe not fair enough. I still don't think we're hearing the whole truth about inflation. They say it's three per cent. More like ten, if you ask me.
Japan - Our view is that Japan's prospects are normalizing and that the outlook for Japanese equities is positive. In our view, corporate balance sheets are healthy and equity valuations look attractive compared to other major markets.
Okay. Well, I've read in that Tony Robbins book I've got - Awaken The Giant Within - that the Japanese go in for constant and never-ending improvement. It's something that W. Edwards Deming taught them after the Second World War. It's why they're always going to come good.
Equity Valuations - Many traditional measures used to value equities indicate that valuations are on the high side, with some in the US more than double their historical norms. Since high valuations are associated with lower future returns, this underscores the importance of identifying areas of the market that are undervalued by investors, consistent with our investment beliefs. Our analysis indicates that these areas can be found - as reflected in our regional themes (e.g. Europe and Japan) and sectoral choices (technology and healthcare).
Well, whatever.
Emerging Markets - We see two factors influencing emerging market performance in 2018: The strength of global economic growth-manufacturing exporters in East Asia and commodity producers like Brazil and South Africa do well when global growth is strong. Also, the direction of US interest rates and the dollar - faster rate rises than currently expected would lead to a rising US dollar, a headwinds for emerging market bonds and equities. Our analysis suggests that global growth and trade will be steady in the next year, that US interest rates are not likely to rise unexpectedly, and that investors in emerging markets should not be put off by the usual political complexities.
Okay, okay. / Now, dear reader(s), Mohammad Syed continues with some stuff, but I don't think we need it. 'Why not, boss?' Well, it's just As long-term investors we ... 'Oh.' We've got the basics. I can't be copying and pasting everything these characters say because ... 'Because?' Because I got a conceptual to write! 'Yippee!' After lunch, of course. 'What are you having?' A luxury egg sandwich, probably.
Laters, then.
Global Growth - We think the global manufacturing cycle is peaking about now, which raises the question: what next for the world economy and where to find value for investors. With robust consumer and investment demand, low inflation and accommodative monetary policy in most countries, we are expecting the looming slowdown to be gradual, with world growth as a whole still firm through 2018. With company earnings in the major markets likely to continue rising and no sign of US recession on the horizon, we continue to have confidence in equities, with a bias towards those regions where we see the growth cycle persisting for longer, like Europe and Japan.
But can things grow forever? That's the question. 'Fingernails do, boss.' What?! 'I've noticed you always keep your fingernails short, to play your guitar, like.' So?! 'Well, they keep growing, man, don't they?' What the hell have my fingernails got to do with the world economy?! 'Well ... probably not much.' Idiot!!!
Inflation - In our search for inflation-beating returns we favour segments of higher-yielding bonds, like financial credit (yielding over 5%) and emerging market debt, and equities, where dividend yields are solid (4.2% for the UK's FTSE 100) and earnings are growing.
Okay. Fair enough. Or maybe not fair enough. I still don't think we're hearing the whole truth about inflation. They say it's three per cent. More like ten, if you ask me.
Japan - Our view is that Japan's prospects are normalizing and that the outlook for Japanese equities is positive. In our view, corporate balance sheets are healthy and equity valuations look attractive compared to other major markets.
Okay. Well, I've read in that Tony Robbins book I've got - Awaken The Giant Within - that the Japanese go in for constant and never-ending improvement. It's something that W. Edwards Deming taught them after the Second World War. It's why they're always going to come good.
Equity Valuations - Many traditional measures used to value equities indicate that valuations are on the high side, with some in the US more than double their historical norms. Since high valuations are associated with lower future returns, this underscores the importance of identifying areas of the market that are undervalued by investors, consistent with our investment beliefs. Our analysis indicates that these areas can be found - as reflected in our regional themes (e.g. Europe and Japan) and sectoral choices (technology and healthcare).
Well, whatever.
Emerging Markets - We see two factors influencing emerging market performance in 2018: The strength of global economic growth-manufacturing exporters in East Asia and commodity producers like Brazil and South Africa do well when global growth is strong. Also, the direction of US interest rates and the dollar - faster rate rises than currently expected would lead to a rising US dollar, a headwinds for emerging market bonds and equities. Our analysis suggests that global growth and trade will be steady in the next year, that US interest rates are not likely to rise unexpectedly, and that investors in emerging markets should not be put off by the usual political complexities.
Okay, okay. / Now, dear reader(s), Mohammad Syed continues with some stuff, but I don't think we need it. 'Why not, boss?' Well, it's just As long-term investors we ... 'Oh.' We've got the basics. I can't be copying and pasting everything these characters say because ... 'Because?' Because I got a conceptual to write! 'Yippee!' After lunch, of course. 'What are you having?' A luxury egg sandwich, probably.
Laters, then.
