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Global Matters Weekly – A turning point for UK mid-caps

So far, the year 2022 has been one that investors in UK mid-capitalisations (mid-caps) would probably prefer to forget. The first six months of this year witnessed the worst relative performance of UK mid-caps vs UK large capitalisations (caps) on a rolling six-month basis since 1986 (as far back as I could find data). By 30th June, they had underperformed UK large caps by a staggering 18%. The performance gap has since widened a little to over 19% on a year-to-date basis. The absolute performance of UK mid-caps is not as stomach churning, but at -15% it is still poor.

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Global Matters Weekly – Has gold lost its shine?

As we approach the end of 2022, it is worth reflecting on asset class returns this year. Global equities and bonds have both suffered significant declines and as a result the traditional balanced portfolio, anchored by these two asset classes, has struggled. Risk assets have had a torrid time due to a combination of factors including bleak economic and earnings outlooks, inflation concerns and heightened geopolitical tensions, which have all weighed on investor sentiment. Surprisingly, gold which has traditionally been deemed as a ’safe haven’ asset has also disappointed this year. Gold is often thought of as a hedge during market downturns and in an inflationary environment, so why has it struggled this year? And does it still warrant a place in investors’ portfolios.

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Global Matters Weekly – The World Cup effect

As a keen student of behavioural investing, I love reading articles on how human behaviour is influenced by emotion and how this translates to stock market movements. If only there was an event that stirred up extreme emotions that the majority of the world will participate in. It just so happens that the FIFA World Cup is here, and according to audience data around 3.6 billion people watch the tournament on television.

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Global Matters Weekly – Temperature Check

I wanted to provide a quick update on the Euro-zone economy. It’s good practice to step behind the headlines, which as we know are written with the aim of being interesting, rather than painting a complete picture of any topic. While we firmly believe that a good macroeconomic outcome is neither sufficient nor necessary for good investment returns (although it does help, particularly in the short term!), we nevertheless need to be aware of the macro when managing portfolios.

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Global Matters Weekly – Yet another update on China

For some reason, any time it’s my turn to write our weekly Global Matters blog, there is something happening in China worth writing about. Or perhaps, it is just my colleagues deliberately leaving me with the honour of updating our readers on the latest developments within the Chinese walls (pun intended). Luckily, these days we are not short of significant news and while the west is struggling with rising rates and elevated inflation, China is facing a different set of issues that still have global consequences.

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Global Matters Weekly – Will the strong dollar continue to spook markets?

We are living in a dollar-dominated world, a fact most famously captured by John Connally, President Nixon’s Treasury Secretary, who once told a group of global finance ministers “the dollar is our currency, but it’s your problem”. Students of economic history will be aware of the disruption that a strong US dollar can cause, however, at times such as this it is important to remember that the global economy is cyclical, and such periods eventually do pass.

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Global Matters Weekly – (IL)Liquidity of property

As mentioned in my previous blogs I am an avid Watford football club supporter. Although there are some ups and (a lot more) downs, being a Watford supporter has had one positive outcome. It’s enabled me to cope with the ever-changing UK political situation. Since David Cameron resigned as Prime Minister in 2016, following the UK’s vote to leave the EU, there have been three UK Prime Ministers over the preceding six years, with the fourth set to be announced.

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Global Matters Weekly – Gilty Pleasures

Three weeks ago, I had just landed in Morocco and with impeccable timing, as I worked out how to use Agadir airport’s ATM, Sterling tanked on the back of the UK government’s now well pored over ‘mini-budget’. I found it mildly amusing that the ticker for the Sterling-Dirham currency pairing is GBPMAD. It certainly felt like it! Of course, this wasn’t a bout of Dirham strength but a Sterling maelstrom resulting from the aforementioned budget, and the Pound was in freefall against every major currency.

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Global Matters Weekly – Welcome to the New Age

Like it or not, there is no doubt that social media is now an integral part of our lives, with our online presence an extension of who we are, and for many, who they aspire to be.

There were almost three billion monthly active users on Facebook in the second quarter of this year, some 37% of the global population. For a business, social media offers a treasure trove of potential customers, but still so many seem to get it wrong when advertising through these channels.

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Global Matters Weekly – Data, data everywhere and not a number to guide

All through life our brains like to use “general rules of thumb” when dealing with problems. These rules may come through personal experience or maybe they are more prescriptive and laid down by doctrine.

When dealing with problems I have sometimes found it useful to use a “factor of three”. For example, if I plan to do a DIY job in the house, bitter experience tells me it will take three times as long as I might expect. Such a guide can help avoid the shock of under-estimation of an outcome.

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