Richard Stroud
COPIERS AND FOLLOWERS UPDATE Hi everyone, just another quick update for you to keep you informed, as I sure a lot of you will have seen by now just how volatile stock markets are at present. Today (Monday 10th) has seen a sharp pullback in stock market prices, with investors worried that tariff policies would tip the U.S economy into a recession. President Trump, in an interview over the weekend, did not rule this out, saying the economy may be in line for a "transition period". A current three-week market sell-off has intensified today, with the S&P 500 down by 2.7% today, but dwarfed by the tech-heavy Nasdaq, down by 4%. Overall the S&P is lower by 4.5% this year, with the Nasdaq index approaching -10%. Fears of a trade war are very much affecting investor sentiment, with the tech sector, but especially the "magnificent seven" stocks are feeling the heat the most. Many tech companies rely on factories overseas for parts and manufacturing, with the fear that tariffs may raise prices. There may well be a short-term bottom to the current selling imminent, but I suspect that whilst worries linger over wider economic health issues the stock market may have a little further to fall before things start to pick up. For us, we do not need to worry, as we are still defensively positioned and are pretty underweight in tech names currently. As I mentioned in my previous post this will change, as the current stock slump will create some good buying opportunities, so for now we can sit back and wait for the markets to settle down. The portfolio, as you would expect, is not immune to the stock market pull-backs and has fallen back itself, but not to the same level as the main indices, as our defensive and bond positions have been helping to balance the fund. Today for example, the portfolio dropped by 0.94%, compared to drops of 4%, 2.69% and 2.08% for the Nasdaq, S&P and Dow Jones respectively. Rest assured I will be keeping a close eye on proceedings, but I suspect we may have to wait a little longer to take full advantage of further price drops. In the meantime, I hope you all have a great week and stay posted for more updates soon. Best wishes, Richard.
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