COPIERS AND FOLLOWERS UPDATE
Hi everyone, time for another update from me as we approach the end of August and into an interesting last few months of 2025.
The Fed has been very much in focus over the last week, starting with the annual summit at Jackson Hole and culminating with the latest attempt by President Trump to influence policy at the central bank of the U.S.
Only a couple of weeks ago, U.S jobs data in the form of wholesale inflation (or PPI) climbed much more than expected, seemingly pouring cold water over prospects of upcoming rate cuts. However, bonds and the wider stock market were buoyed by comments from Jerome Powell at the Fed's annual gathering of world bankers at the end of last week.
The Jackson Hole summit has historically often been used by the Fed to signal policy changes and with the latest rate decision looming soon in September, Powell signalled that "the balance of risks appear to be shifting". This caused bond yields to fall and powered stocks higher, with megacap technology companies such as $GOOGL (Alphabet Inc Class A) and $NVDA (NVIDIA Corporation) leading the gains.
Donald Trump has been pressuring the Fed repeatedly to cut interest rates to help ease the U.S' debt burden, so whether this was an attempt by Powell to ease the pressure on the Fed remains to be seen. Certainly there has been little noticeable data to justify an abrupt policy change.
In the last day, Trump seemingly has further tried to influence the Fed by attempting to sack one of the board governors, Lisa Cook. As the Fed is independent of any government party, it remains to be seen whether Trump has the authority to do so, but the pressure on the Fed to cut rates quickly carries on unabated.
From my point of view, much as I would like to reinstate a long-term treasury position back into the portfolio, presently there are too many unknowns to make it a strategy I would be comfortable with. For now, our excess funds remain in very short-term bonds, where they will continue to earn a decent yield whilst we wait.
In fact, this position has increased today after I sold 2 of our positions. $ABF.L (Associated British Foods) has been a good defensive position for us and as well as producing a 22% profit, we have benefitted from a decent yearly dividend of around 4%. However, growing pressures from tariffs are seemingly starting to affect the business, so now seemed a good time to sell.
Likewise with $BP.L (BP) who have paid an even better dividend north of 5%, we have sold this position with a small 5.5% profit and I will be looking for better opportunities for the funds in due course.
As always, please feel free to comment or post questions below and I will do my best to respond quickly. We are currently just over 11% up for 2025 and I am looking for further progress as we look forward to September and beyond.
Best wishes, Richard.... Show More
Thanks for the update, Richard. Clear and consistent communication like this builds long-term trust with copiers and adds real value to the community. It’s also a great reminder of how much the Fed narrative shapes not only short-term moves but also long-term positioning. Curious to see how others are... Show More
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Thu Dec 11 2025 09:08:03 GMT+0000 (Coordinated Universal Time)
