Mazars Wealth Management Investment Newsletter Summer

Fri 19 Jul 2019

Global equity markets continued to rise during the second quarter of the year, with global equities now returning over 20% in Sterling terms year to date. Similarly to the previous quarter, this market rally occurred despite any real optimism about the state of the global economy although some caution could be observed in the price of Gold which rose 11.6% during the quarter. Markets appear to have returned to the long-standing theme of this economic cycle – that central banks remain willing and able to ease monetary policy at the earliest sign of a weakening economy, and that this alone is sufficient to override concerns about a slowdown of economic growth, at least in the short term. The US Federal Reserve, under overt pressure from the US President, has indicated that rate cuts may be expected before the end of the year, completing their volte-face from their tightening stance of the last few years.

Our Investment Committee agreed to maintain our cautious stance reflected by our neutral position in equities and overweight position in gold. The Brexit conundrum remains, but with the likelihood of a no-deal Brexit having increased. We have therefore reduced our exposure to UK commercial property and domestically focused UK stocks.

David Baker, CIO