Monthly market blueprint - July 2021

Uncertainty is evident in supply chains. The global stocking/unstocking cycle has been disrupted, as economies open up and close down without warning. Complex products, like cars or computers, rely on functional supply chains to produce the thousands of parts needed for assembly. Purchasing managers can’t plan, so they order at the last minute. Without planning, costs skyrocket, and lead and delivery times are extended to the point of nearly breaking supply chains.

Read our full update

Uncertainty is evident in investments. While headline indices remain at all-time highs, portfolio managers stick with the sure winners, once again growth stocks. Income stocks on the other hand, where investors absolutely need a modicum of certainty about future cash flows, suffer. As the bond market is dismissing all notions of future inflation, it's the gold market and style that investors are oscillating between.

The pandemic, eighteen months in already, is leaving the world in disarray. The objective for asset allocators, at this point, or any other for that matter, is not to predict the future. It is to prepare for eventualities. We have spent the last few months mapping outgrowth and inflation scenarios and looking at what these logically mean for risk assets. From a return to before 2008, to growth managed by the state, to stagflation, and to the return of ‘secular stagnation’, we have looked at the past and reasoned about what the future might look like under all of these. While we can’t accurately predict where the world will go, we have made sure our portfolios are resilient and prepared. We have evened out our growth and value exposure, focused on managers with a proven ability to create alpha and we have taken few ‘bets’ only in high conviction and low downside positions, like an overweight on UK equities and an underweight in bonds.

Read more detail by downloading our full update below.

The economy and your investments webinar

Additionally, in our July 'The economy and your investments' webinar, our Chief Investment Officer and Chief Economist will examine the landscape for investors and answer the big questions which are on everyone’s minds. Register here.

How we can help

If you would like to know more about how we can help you manage, plan, or invest for your future, please get in touch.

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