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Last week my colleague Gary Moglione shared his thoughts on the advantages of adopting a contrarian stance to investing, commonly referred to as value investing. However, there are other approaches to investing which can also generate strong returns if you have the required skill set and mentality. Simply put, the converse of the contrarian approach is known as momentum or growth investing.

The UK is currently experiencing a scorching heatwave, with temperatures reaching 28℃. While it may not be extreme for some of our international readers, it’s a significant event for us in the UK. During such heatwaves, consumers tend to rush out and buy fans to keep cool. Last year, fan sales increased by a staggering 1300% as prices surged and stocks ran out. It’s interesting to draw parallels between the scarcity of fans during these hot times and the behaviour of investors in the stock market.

A month which began with the collapse of another large bank in the US, First Republic, and dramatic falls in the share prices of several other regional banks, ended with the euphoria of the rapidly unfolding AI boom reflected in extraordinary share price gains for the major beneficiaries, most notably Nvidia, whose share price gained 36% in May, taking its return YTD to 160% and a market cap of $1trn.

Contrary to that saying, property has been anything but a safe bet so far this year. The outlook for property companies has improved relative to equities so far this year, and for that investors have been rewarded with a swing of almost minus 9% in performance. Counterintuitive to say the least.

I am writing this piece from a wet and cold Italian countryside in early June. Last year on this very day, it was really hot and we were cooling down in the Adriatic sea. There’s climate change for you! From an investor’s perspective, I’m twice as worried though. What’s the impact that all these dynamics are having on my investments? What’s the impact my investments are having on these dynamics? How do I devise a win-win plan for my portfolios?