Richard Stroud @Richardstroud: "COPIERS AND FOLLOWERS UPDATE Hi everyone,..."

United Kingdom

COPIERS AND FOLLOWERS UPDATE Hi everyone, as we near the end of the month it's time for another update, during a particularly volatile time for stocks. February has been packed with ups and downs, after a series of events leaving stock market investors and consumers alike starting to struggle to find confidence. Of course, the old news from a few weeks ago concerned China's DeepSeek AI, which claims to use much less powerful chips (and subsequently, a lot cheaper) to produce a competitive AI model for a fraction of the billions that Silicon Valley is spending. This caused stock markets to tumble as investors queried whether makers of premium AI chips (such as $NVDA (NVIDIA Corporation)) are largely overvalued on the back of what China has achieved. However, such claims from DeepSeek have now been questioned and the Nasdaq's 3% pullback was more of a case of investors selling first and asking questions later. Another large catalyst of stock volatility came from the U.S President, as long suspected tariffs that Trump has been promising materialised over night with almost instant 25% levies on goods from Mexico and Canada. Again, after negotiations between countries took place and tariffs now pending rather than imminent, the stock market has for the time being left these worries on the back-burner. Over the last few weeks, concerns over the U.S economy have resurfaced, which have started the latest stock jitters, which were particularly noticeable last Friday with the Dow dropping nearly 750 points for its worst day of 2025 so far. A volley of data raised new concerns over a slowing economy and sticky inflation, with the five-year inflation outlook coming in at 3.5%, the highest since 1995. Consumer sentiment has also fallen more steeply than was expected and on top of that, U.S home sales fell more than expected last month. Although sentiment has been down of late, the portfolio has weathered this pretty well. As of today, the "magnificent seven" group of stocks, featuring Nvidia, $MSFT (Microsoft), $META (Meta Platforms Inc) $TSLA (Tesla Motors, Inc.) etc. is now in correction territory having fallen on average over 10% since its last high. As a consequence, the tech-heavy Nasdaq index is now also negative for the year. Because of the economic concerns, investors have been ditching tech stocks for safer haven assets, and as the portfolio has a larger defensive allocation, our gains are slightly ahead of the main U.S indices so far this year. Bond yields in particular have been falling steadily over the last few weeks which has helped keep the portfolio steady. I have already stated that our bond allocation will reduce as things steadily improve, so I will be watching things closely to add to our tech allocation, hopefully in the near-term, especially if prices start to become a bit more attractive. For now, I think we are well positioned to sit through this latest period of stock volatility, but of course if there are any questions please keep adding them to the feed. Many thanks and have a great rest of the week! Best wishes, Richard.

4 Mentioned

NVDA

MSFT

META

TSLA

Strictly Necessary Cookies

Performance Cookies

Functional Cookies

Targeting Cookies