COPIERS AND FOLLOWERS UPDATE
Hi everyone, and welcome to 2025 as I give you my first (and apologies, rather late) update to the New Year. It has been a very volatile period to say the least as sentiment goes from highs to lows, so here is a low down of the main points over the last few weeks.
The end of 2024 going in to 2025 was a bad patch for stocks, with the Dow Jones suffering its longest losing streak since 1974. On the back of this was, once again, disappointment at the Fed's more hawkish stance. We saw rates cut by a quarter point but future expectations now point to just two rate cuts in 2025, down from four.
The consensus now is that the neutral rate, which is essentially the interest rate that neither hinders nor promotes growth, is now higher than was previously thought, showing that the U.S economy and consumers continue to be strong and resilient. It seems that, for the moment, we are back to good news being bad news for stocks.
Stock market worries were exacerbated by the prospect of high import tariffs from U.S president Trump, with the addition of lower taxes and higher growth igniting concerns about inflation being pulled higher once more. At one stage the S&P 500 had pulled lower than before Trump's election victory.
However, things now seem a little more rosy, with last week's inflation figures coming in lighter than was thought. Wholesale inflation increased by just 0.2% in December, less than the 0.4% that was expected, with core inflation also coming in under estimate.
As well as this, a strong start to earnings' season led by the big banks have further helped lift U.S stock markets, whilst on Tuesday indices got a further lift after comments from Trump regarding international trade that were a bit softer that was first thought. Our portfolio has also got back on track, and is now around 2% higher so far this year, despite the big drop in treasury prices.
My feeling is that this sort of volatility will feature quite regularly this year and, although general sentiment towards the U.S is still very good, we should not be too surprised if there are quite a few ups and downs over the course of 2025.
As far as our tactics go, at some point I will be reducing our treasury positions a bit, to put funds to use elsewhere. Although the bonds we own provide a good income and stability to the portfolio, I think we will find better growth this year in other sectors, especially if the consumer remains strong and higher interest rates don't hold the economy back.
Of course, I will make you all aware of any changes to the portfolio I make, but I have come to the conclusion that after a couple of very slow years it is much better to stay invested and ride out any volatility than to be too cautious and miss out on growth.
I hope you have a great rest of the week and keep watching for more updates coming from me soon.
Best wishes, Richard. ... Show More
Hi Richard, as already mentioned by other copiers, it seems my copy is not in synch with yours. In fact it shows 46 position Vs 50 positions in yours. FYI: I am copying you since September 2021. Whats the problem? How and When it can be fixed? Thanks in advance for your response... Show More
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
