Markets rebound as data replaces tension... Remain diversified amid geopolitics says investment analyst...
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Markets rebound as data replaces tension
The markets are generally higher Monday following the subdued sentiment of the last few sessions over North Korea.
Data is in focus with Japan’s GDP exceeding expectations at an annualized 4% in the second quarter, its sixth consecutive quarterly rise and the largest for around a decade.
Rob Carnell, chief economist for Asia at ING in Singapore said that it put Japan at the top of the growth table among the G-7 nations.
Asian equities closed mostly higher shrugging off weak data from China on retail and industrial production. Tokyo closed almost 1% lower despite the GDP figures.
European markets are trending higher with banking stocks among the strongest performers. Eurozone industrial production was lower than expected and down from the previous reading.
Wall Street and Toronto are expected to open higher. Canadian home price data is due.
Remain diversified amid geopolitics says investment analyst
The current tension between the US and North Korea is a reminder to investors to remain diversified.
That’s the view of Tom Elliott, International Investment Strategist at deVere Group who says we should also be aware of the risk of responding to geo-political shocks by selling assets: “Too often we find ourselves selling at the moment of highest fear, only to be out of the market as a rebound in stock market prices takes place as tensions wind down.”
“There are few better illustrations as to why a long term investor, keen to maximise returns while keeping portfolio volatility low, should hold core government bonds in their portfolio as part of a balanced portfolio,” Elliot adds.
He believes that the US-North Korea issues will last for years to come but says that is not the only reason to remain diversified.
“Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued U.S. stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies,” he says.
The markets are generally higher Monday following the subdued sentiment of the last few sessions over North Korea.
Data is in focus with Japan’s GDP exceeding expectations at an annualized 4% in the second quarter, its sixth consecutive quarterly rise and the largest for around a decade.
Rob Carnell, chief economist for Asia at ING in Singapore said that it put Japan at the top of the growth table among the G-7 nations.
Asian equities closed mostly higher shrugging off weak data from China on retail and industrial production. Tokyo closed almost 1% lower despite the GDP figures.
European markets are trending higher with banking stocks among the strongest performers. Eurozone industrial production was lower than expected and down from the previous reading.
Wall Street and Toronto are expected to open higher. Canadian home price data is due.
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Latest |
1 month ago |
1 year ago |
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North America (previous session) |
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US Dow Jones |
21,858.32 (+0.07%) |
+1.02% |
+17.67% |
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TSX Composite |
15,033.38 (-0.27%) |
-0.93% |
+1.94% |
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Europe (at 5.00am ET) |
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UK FTSE |
7,349.77 (+0.54%) |
-0.39% |
+6.27% |
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German DAX |
12,140.87 (+1.06%) |
-3.89% |
+13.32% |
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Asia (at close) |
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China CSI 300 |
3,694.68 (+1.30%) |
-0.23% |
+12.16% |
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Japan Nikkei |
19,537.10 (-0.98%) |
-3.26% |
+16.75% |
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Other Data (at 5.00am ET) |
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Oil (Brent) |
Oil (WTI) |
Gold |
Can. Dollar |
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51.84 (-0.50%) |
48.62 (-0.41%) |
1287.50 (-0.32%) |
U$0.7838 |
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Aus. Dollar |
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U$0.7876 |
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Remain diversified amid geopolitics says investment analyst
The current tension between the US and North Korea is a reminder to investors to remain diversified.
That’s the view of Tom Elliott, International Investment Strategist at deVere Group who says we should also be aware of the risk of responding to geo-political shocks by selling assets: “Too often we find ourselves selling at the moment of highest fear, only to be out of the market as a rebound in stock market prices takes place as tensions wind down.”
“There are few better illustrations as to why a long term investor, keen to maximise returns while keeping portfolio volatility low, should hold core government bonds in their portfolio as part of a balanced portfolio,” Elliot adds.
He believes that the US-North Korea issues will last for years to come but says that is not the only reason to remain diversified.
“Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued U.S. stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies,” he says.
