Plus: Consumers prevent inflation disaster, move towards euro/dollar parity, invest or not invest in metaverse, recipe for success of a top fund, and more.
Robust consumer spending can prevent inflation catastrophe
The current high inflation has been compared with that of the 1970s. But robust consumer spending is causing different circumstances this time, according to Schroders chief economist Keith Wade.
Because inflation is temporary
Eurozone inflation has moved up to 7.5%, its highest level ever.
Meanwhile, the ECB is still holding interest rates at negative levels with no plans to normalize.
This is perhaps the greatest disconnect between monetary policy and rising prices that the world has ever seen. pic.twitter.com/RPhn1MsRR4
— Charlie Bilello (@charliebilello) April 5, 2022
Ukraine live blog: Risk of recession insufficiently priced in
What does the Russian invasion of Ukraine mean for the financial markets? Asset managers give their vision.
Towards euro/dollar parity
— jeroen blokland (@jsblokland) Apr 6, 2022
The corona bill is on the table
High inflation is the bill that must now be paid for deploying unprecedented monetary and fiscal measures after both the financial crisis and the pandemic, says investment strategist Rob Almeida of asset manager MFS.
Metaverse: a real investment option or not?
According to Jack Neele, fund manager at Robeco, this technological innovation is potentially important, so much so that several large companies are already investing in it. But what exactly is it?
Spreading with bonds is not a good idea for a while
High inflation is good for commodities and bad for bonds. Bond investors felt that last month.
Global Bond Selloff deepens as Fed steps up tightening rhetoric: US 10y yields jump to 2.6%, Benchmarks jump in Australia to reach highest since 2015. https://t.co/ZM05ZnsEpF pic.twitter.com/gk3wmOwyPQ
— Holger Zschaepitz (@Schuldensuehner) Apr 6, 2022
The recipe for success from top fund Fundsmith
“Buy good companies, don’t pay too much for quality, and don’t do anything else. According to Smith, the latter is especially difficult for investors and emotional discipline is crucial to success as an investor. To assess an investment strategy, you need to look at the results over a complete market cycle, rather than over a short period of time such as a quarter.” Read Morningstar’s story.
Dealing with corrections is an art
The good news: “If you are a long-term investor, every large decline should be viewed as an opportunity. Why? Because time is on your side. And history has shown us that the longer your holding period, the more time you have to compound, and the higher your prospective cumulative returns.” Great story.
Early movers are the winner of the climate crisis
Schroders predicts that there will be large yield differences in the coming years between companies that take the climate crisis seriously and companies that don’t like it.
Bankruptcy Russia closer
The US has imposed a new financial sanction on Russia. The country is no longer allowed to use dollar reserves it holds in the US to pay interest and loan repayments in dollars. This means that Russia will be faced with difficult decisions and may be closer to bankruptcy, reports RTL Z.
Sometimes it’s pretty rough
— Yahoo Finance (@YahooFinance) Apr 6, 2022
Active vs Passive
The returns of the IEX Fund 40 (actively managed mutual funds) and the IEX Index 20+ (ETFs).
The Editors of IEXProfs consists of several journalists. The information in this article is not intended as professional investment advice, or as a recommendation to make certain investments. Editors may hold positions in one or more of the listed funds. Click here for an overview of their investments.