It's particularly unpleasant when all the other markets sign up for the slimming trend too. The MSCI World, the global stock market barometer measured in US dollars, lost ten percent in 2018. The US, Europe, Japan, the emerging markets – all the key investment regions – got leaner. Oil and gold in US dollars rounded off the weight-loss parade.
In 2019, the investment markets put the fat back on. Many, however, are wondering whether the trade dispute between China and the US, Brexit, or other events might turn out to be unwelcome appetite suppressants. Given that bonds are perennial lightweights, these are legitimate questions. The good news: equity markets swing from S to XXL. The bad news: the when and where are not as predictable as your own body weight, and aren't influenced by calorie-rich holidays.
How long the markets will fast or bulk up again, and exactly when they'll pile on proper reserves, no one knows. Because no one can say how the current economic and political conflicts around the world will be resolved and how they'll turn out. That's why the annual forecasting marathons about the precise timing of the fat and lean phases are pure guesswork that gets no one anywhere. Forecasts and speculation are diet pills for your returns. The tried-and-tested weight-gainers are staying power and strong nerves. Because one thing is certain: investment markets are subject to the yo-yo effect. And studies have shown this too: most private investors who set out to give their portfolios a few extra pounds on their own fail. And over the long run, equity markets tend to be more chubby than lanky.
quirion's fattening-up recipe: we rely on the earning power of the market as a whole, so that returns bulk up over the long run.
Keep a cool head and invest your money with quirion.
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