Weekly Thoughts 29 April 2022

My avid readers will know I haven’t written for a few weeks. I’ve not had much inside of me to say…..

But I thought to make myself go find some content this week. The result is that I have a couple of points and thoughts from various asset manager emails and video links that I get sent on various matters from time to time.

Sarasin – London chaps – brought the thoughts of how China’s zero-COVID policy was adding another angle to global economic woes because it is contributing to supply chain disruption. If you’ve followed any of this news, China has been quite heavy-handed in managing their rising cases. They’ve even compelled some factory workers to live in the factories they work in, in order to reduce movement and transmission. A bit depressing that.

Russell Collister, the Chief Investment Officer from FIM Capital on the Isle of Man, spoke in a video I watched about the first quarter of 2022 being difficult for markets simply because of inflation, let alone Ukraine and COVID and anything else, he said. Current global inflation is still largely a result of too much cash just being given out to people during and following the COVID story. He thinks inflation will continue for a while. He touched on wage pressure, agriculture and commodity prices, and interest rates. In times of inflation, he says that equities – shares – continue to give the investor the best place for some protection.

Russell is a great guy. When I went to visit FIM a few years ago to walk the floors, Russell took me sailing on the ocean and then for a drive around the Island in his BMW along the roads used for the famous TT motorbike race. When I quizzed him about security of life living in the oldest continuous parliament in the world, he told me that they were never quite sure where their house keys were!

These above factors might continue to keep markets under pressure for a while, with capital growth being slow. Which means it continues to be a season to get available cash into the markets, not keep it in the bank until the markets have already recovered by their first 20%.

And now the newsletter that wasn’t nearly become too long.