By Craig McAvinue – 1 September, 2024
“Behind every stock there is a company. Find out what it is doing”
The month of August draws to a close and despite previous fears and more volatility than some would desire, the month was a generally positive one with the exception of China
The S&P posted its fourth straight winning month and so far in 2024, only April has been in the red..
Data from Google Finance
The U.S. Dollar fell. With a more bullish outlook, investors are more open to riskier assets. With other economies in Europe and Asia also having a positive outlook, this contributed to some lost ground for the greenback
Data from Google Finance
V for volatility was the pattern for August as we saw a quick recovery from earlier sell offs and unwarranted press around a recession.
Strong earnings reports and optimistic future guidance from key players like Nvidia, Microsoft, and Alphabet helped drive the technology sector higher, so by default due to the size of these businesses, the markets as a whole.
Other big players in Consumer Discretionary such as Amazon and Tesla also posted good results, helping the overall market through the bump.
Although the volatility was quite significant with the drop and gain sitting around 9%, it once again highlights the way emotion overrides fundamentals. Economic outlook in general is good with Inflation data for July, showing a decrease. This eased concerns about further aggressive interest rate hikes by the Federal Reserve, who signalled a willingness to pause further hikes if inflation continues to moderate. This dovish stance provided a late-month boost to equity markets as it alleviated some fears of tighter monetary policy.
China remains the laggard with declining exports and industrial production, this impacts particularly commodities and multinational companies with significant exposure to the region. However, hopes for additional stimulus measures from the Chinese government provided some support.
Months like the last highlight the importance of being committed to your portfolio. Buy good companies managed by good managers and you will be rewarded for staying invested. Depending on the time horizon of your portfolio though, you do need to be conscious of equity exposure due to their volatile nature.
Ensuring this balance, whether it be more bond exposure, or ensuring profits are taken and looking at non market correlated assets is also a tried and tested way to maximise growth.
These articles are intended to give you enough information to make informed decisions, but insurance is complicated. Whether you still have questions on this topic or feel ready to take the first steps toward getting a policy, our advisors can help.
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