Bath/Head Office & Unquoted Equity Team:
London Office & Quoted Equity Team:
Edinburgh Office & European Quoted Equity Team:
The Financial Ironmonger Blog No 52/2018

The Financial Ironmonger Blog No 52/2018

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.

–THE FINANCIAL IRONMONGER BLOG NO 52/2018–

There was a certain inevitability on how the year turned out for investors, where, in the end, there was no place to hide. One can regard the collapse of local-currency emerging market debt as a small problem in a far off place, but it was just one pointer that all might not be good under the bonnet.

The Donald’s tax cuts injected a sugar rush in to an economy, which was doing pretty well already, but then he queered the mix with his trade war with China, and anyone else that wanted a scrap. Ostensibly, he is the winner, but the S&P 500 has fallen 16% since the start of October, encompassing the worst December since 1931.

Other assets have not escaped. Most western equity markets are down 20% in a matter of weeks, with the UK FTSE 100 15% below its peak in May, lower than the level achieved in 1999. Unbelievable. Low cost tracker fund, anybody?

Whilst the cause of the mayhem is quite easy to determine, (trade wars, rising interest rates, quantitative tightening, Brexit, political uncertainty, collapsing oil price), it is more difficult to see what is going to turn this round.

In the UK, one wretched subject dominates the agenda, arguably driven by the least informed. You can decide whether that is the politicians, or the people they purport to represent, but the outcome is much the same. Uncertainty breeds on itself.

HMV, the only national retailer of music related products, went bust this week, not even having the decency to hang on to January, and join many others that have lost the plot. It’s not that consumers don’t have the disposable funds, they just will not commit to anything that is not essential. Hard to see what is going to change between here and the end of March, when we leave the EU, deal or not.

One reader likened it to the Millenium Bug, Y2K, when all the planes were going to fall out of the sky, and life in general was meant to seize up. It was a highly lucrative time for the consultants, who were charging the company I then worked for £1,200 per day, plus VAT. For each graduate trainee that wandered round the place!

Clearly, they had no more idea than anybody else what was going to happen, and I suspect the next few months will echo this. Roll on Easter!

–MORE ABOUT OUR GUEST BLOGGER, DAVID OAKES–

David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.