After a strong rebound and some signs of a relaxation of the lock downs we are now entering ‘Phase 2’. The actual damage done will become clear and fears about a viral resurgence are likely. Consequently, we expect a sideways market for a few months. Long term returns are unlikely to be impaired however, although a temptation to unleash modern monetary theory would be alarming. Japan remains our favourite equity market.
This week we revisit an old favourite of ours, asset allocation. Specifically, we begin this article by saying that ýou live and you learn, and the past couple of months have certainly taught us a lot.
This week we would like to visit the topic of property. Given the unprecedented events of the past month and rapid changes from both the monetary and fiscal side of the equation, we would like to try and grapple with some likely outcomes. Something that is particularly relevant given our exposure to commercial and, more specifically, retail property.
With a bit of luck, continued good behaviour, and the arrival of more medical equipment, we can see an end to isolation. From here-on, it might not be 100 days, let alone 100 years. People will be glad to be out and about and back to work. While human interaction may change for the better for a little while, there will be long term significant persistent changes in attitudes, behaviour and policy, by companies, individuals and governments as a result of this pandemic. Some beneficial for investors, some not so much.
This week we visit perhaps one of the most prominent and divisive topics in investing at present. That is the future of energy markets and, in particular, where the price of oil heads to from here.
As always, take our ramblings with a grain of salt since, like you, we are trying to make sense of an investment universe that gets ahead of us. One recollects the words of Jean Baudrillard in this environment for “We live in a world where there is more and more information, and less and less meaning.” As such we shall try make use of our limited rationality to extrapolate as much meaning as we can.
With governments and central banks throwing the kitchen sink at the current crisis caused by CCOVID-19, where does this leave us? More specifically, we will try and focus on where we see the biggest risks.
Markets & Commentary
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TAMIM Asset Management provides general information to help you understand our investment approach. Any financial information we provide is not advice, has not considered your personal circumstances and may not be suitable for you.