Europe – An Opportunity or Basket Case?

It would be fair to say in the last five years or so the European economy has hardly had a great press nor been high on investors’ buy lists. The seemingly endless Greek debt crisis, very high youth unemployment in southern Europe, issues with Italian banks, political woes and now a fractious divorce as the UK exits the EU have …

Positive on Europe

Despite the ongoing uncertainty surrounding Greece’s debt problem, Invesco Perpetual’s European equity team are upbeat on Europe. In a Q&A session today with two leading fund managers although it was noted Europe has been uniquely impacted from a double whammy  – the global banking crisis and more latterly the Euro crisis, the good fundamentals were highlighted. Money printing or QE …

Half Time Team Talk

In football parlance, for investors we have just come out for the second half. So what is the half time assessment of stockmarkets in 2014? My brief comments are based on my own observations and those of Neptune Investment Management, M&G and Neil Woodford, formerly of Invesco Perpetual and manager of the newly launched Woodford Equity Income fund. Equity Market …

Tail Spin, Fundamentals and Europe

Markets are in a tail spin, emerging markets and Japan have fallen sharply, the US modestly, odd given it was the tapering off of money printing by the Fed that got the bears going. Risk averse investors have been buying dollars, emerging market currencies have fallen. Japanese Government Bonds (JGBs) are volatile, yields have spiked with falling prices spooking the …

Cyprus Bank Robbery

News of the jaw dropping proposal to raid bank deposits in Cyprus as part of a bail out deal has reverberated around the world. The response by and large has been one of incredulity and anger. Aside from the fact that it looks and feels like morally indefensible legalised state sponsored theft, the unintended consequences could be disastrous. It will …

Favoured Investment Opportunities

Recently in advice to a client on investment of cash I briefly surveyed a variety of my current favoured ideas and other options. I thought my comments would form the basis for a blog post, so here goes.   1. Cash   This can be retained for risk reduction purposes. Cash is suitable for very cautious investors who are more interested …

Future Outcome for the Eurozone

I recently read an excellent article on the Eurozone from John Greenwood, Chief Economist of Invesco Ltd. In it he argues that there are now only two possible outcomes to resolve the debt crisis – unilateral default and exit by Greece and possibly other economies or full fiscal union. Prolonged austerity will not work.   The first scenario with a …

Medlee of Comments

I am awaiting something inspiring to write about; nothing has fired my imagination in recent weeks. So in the meantime here are some random thoughts on investment issues.   Markets have been weighed recently by fears over Spain’s economy, after a poor government bond auction and rising bond yields. Spanish stocks also fell on Thursday whilst other markets rallied. Spain has …

When is a default not a default?

When it is a Greek debt restructuring deal! This is the largest bond swap in history with the majority of private investors such as banks and pension “voluntarily” accepting up to 74% haircuts worth around £90 billion in total. This slashes the Greek debt burden and triggers a further £110 billion in loans from the so called Troika (IMF, EU and ECB). The question …

Equity Markets Rally

You will have noticed that equity markets have rallied in recent weeks. This is due in part to the European Central Bank (ECB) firing its “big bazooka” at the end of December, with unprecedented buying of government bonds and injecting liquidity into the financial system. The result has been a very large reduction in sovereign bond yields, notably in Italy …