Investment News & Views

Portfolio Update – Another difficult week across the world

This has been another difficult week across the world for many people.

The total number of cases and deaths are continuing to increase worldwide. The hope of flattening the curve is an expression which defines this crisis as the daily numbers are reported. The human cost on individuals, their families, friends, communities and the long-term impact on health care providers and all those key workers who put themselves at risk now and the impact on them in the future cannot be underestimated.

Different countries are in differing stages of the virus. China is in the process of opening Wuhan again and the majority of new cases are now imported. Italy and Spain, both amongst the most impacted countries in Europe, are appearing to pass the peak of the outbreak. While others are just a week, or in the cases of Japan and Singapore, days into new ‘shelter at home’ restrictions. The economic impacts are varied depending on where in the Covid-19 timeline they are. Either way, the world’s economies and their citizens’ livelihoods have been dramatically impacted.

Oxfam, based on research from Kings College and the Australian National University, has warned that the economic impacts could increase global poverty by up to half a billion with over half of the world’s population living in poverty by the end of the Covid-19 crisis. In the US, another 6.6 million people have filed for unemployment with 10 million filing in the previous 2 weeks. Many more have been unable to report due to fact that the Labor Department has been overwhelmed. US lawmakers have already passed a $2tn rescue bill and are now discussing further relief.

There have also been glimmers of hope. China’s factories and economy are starting to pick up. Countries across Europe are beginning to slowly ease or hint at easing restrictions in a hope to return to normality as the infection rates decline. In the UK and in still many countries, it is still too early to say when such an easing of restrictions will occur, but there is now a precedent to suggest that it will occur before a new vaccine is established. In most likelihood, this would be a cautious reopening of society, as without a vaccine the threat of a second wave of infections is ever present. Life will most likely take on a new sort of reality.

Guardian Portfolios

We have continued to monitor the trend-following signals daily and have added several shorter signals to establish an earlier trend. This week there was a change in the shorter signals which reflected the beginnings of a trend. This change occurred almost overnight. We immediately decided to further increase to 2/3rds our US and International Fund allocation and to increase the allocation to 1/3 across all other equity markets. These trades have been actioned but will take a few days to settle.

As of close of business last night, there was a slight drop in most of the equity and bond fund prices which will work in our favour due to the timing of the equity purchases. The equity unit trusts continue to be up since the beginning of the month. We will continue to review these signals daily.

Foundation Portfolios

We are almost ready to launch our Foundation Portfolios. We will be sending out Fact Sheets shortly. They are available on the same platforms as the rest of our portfolios. Foundation Portfolios are an entirely unit trust buy and hold proposition. There are therefore no additional transaction charges for monthly deposits, and they can be held as a blended proposition with Guardian portfolios. For any additional information please contact us.
US Bear Market Recoveries

We have also added a blog regarding the History of US Bear Market Recoveries. Please find the details here:

The History of US Bear Markets and Recoveries

  • Friday, April 10, 2020

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author

Tomiko Evans

Chief Investment Officer

Tomiko is Chief Investment Officer of Crossing Point and holds the IMC qualification for Investment Management.