Account update. In the USA, markets have corrected sharply over the last few days and the sell-off continued today with both the $SPX500 and $DJ30 dropping sharply.
Fear and uncertainty is driving the markets right now for several reasons, mainly related to high inflation and rising interest rates, with the possibility of recession. As long as this uncertainty exists, then we will continue to see more pain as it gets priced in by investors.
On top of these worries, we now have geopolitical concerns with Russia and Ukraine. This situation could worsen further, spooking the markets as investors risk off.
As the inflation concerns have grown over the last few months, I have steadily diversified the portfolio into several areas that I consider lower risk, less correlated to equities and generally offer decent dividends. A large proportion has been invested in property companies and real estate investment trusts, REIT's, such as $IUKP.L and $MPW (Medical Properties Trust Inc)
The portfolio is also spread across different international markets and not just the USA, but Japan, emerging markets and the UK.
I have also continued to add value with multiple forex trades.
I have been very proactive in managing the portfolio and adjustments are made on a regular basis. This will continue as we gain more information about inflation and interest rates.
The UK market seems relatively stable right now and as Covid restrictions are removed, I envisage further improvements and opportunities.
The USA is a different story and as we wait for the Federal reserve to complete the Tapering process in March and set rates, we will continue to have uncertainty and with it, volatility.
As rising interest rates bite, inflation will tail off and central banks will become less hawkish. But it won't happen over night and will most likely take many months.
I will continue to have this balanced portfolio approach and and try to take full advantage of the changing situation that lies ahead.
Many thanks. Wayne... Show More