February Update.
The view from the UK is still somewhat confusing. $TSCO.L (Tesco) and $LLOY.L (Lloyd's Banking Group PLC) positions still nicely in the green. The overall economic picture is not so easy to figure out. Reports suggest that inflation is set to come down, perhaps to around 4% by the end of the year (target is usually 2% of course, but we’re on our way down from double digits). Perhaps recession will be avoided. This means a fresh look at UK REITS, which I have previously held. Actually, the UK housing and rental markets are still reasonably healthy. UK economy tends to be closely linked with the house market, but we have not yet seen the price drops that were previously talked about, except perhaps in some specific locations. For the moment, the portfolio remains largely in cash. My strategy is always the long term view, so I never try to actively time purchases, but for now this is the approach I have taken to reduce overall volatility (sorry, it is not the most exciting portfolio!). Now that we are getting more positive signs around the UK, I may consider gradually re-opening some old positions.
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