After the turmoil of March, April provided some relief both in real and relative terms. All our models out-performed their peers as our bias towards gold, infrastructure and Asia bore fruit. It was also good to see the indices recover some of their losses.
However, it is looking increasingly likely that normality is not about to return any time soon. Whilst governments continue to do “whatever it takes”, this provides an artificial sense of wellbeing at best. Sooner or later companies will go to the wall and markets appear to be living in a bit of a bubble. The more one reads the financial press the more confusing it gets as predictions of several likely scenarios all seem plausible. We are heading for a deep recession which will take time to reverse. Markets are likely to mark time, with volatility remaining above average. We will be looking to trade on this volatility to maximise returns.
The one positive that may arise from this is less reliance on passive investing. Automatic trading over-inflates bull markets and intensifies bear markets. Passives are no place to be in the current environment.
During the past six weeks we have maintained our services by enabling all staff to work from home. We now have a digital signature facility which recently enabled us to take on a new client, investing £1million, by video conference. Zoom is the most popular video conferencing facility but it has raised questions regards security. This appears to be in part due to the use of Chinese data centers for non Chinese companies, which has since been rectified. We have been working with our IT people to enhance security around this and feel comfortable it is fit for purpose. Our advisor team have been trialling this and it works well. It is not the same as a face to face but it does facilitate quicker and more environmentally friendly meetings.
There is no doubt the world will not be the same again. Video conferencing and flexible home working look as though they are here to stay.
|Paul Beasley ACII