"Some people have called me lucky, but its strange because the more I practice, the luckier I get" (Gary Player).Another month has passed and after a rather uncertain first half of 2018, it would appear that confidence in the markets has returned with all the major indices in positive territory for the month of July. As has been the case for a while now, the US leading the way...the raw data being
Dow Jones +4.7% +2.8%
Nasdaq +2.1% +11.1%
FTSE +1.5% +0.8%
Nikkei +1.6% -0.4%
SSE +1.0% -13.0%
Dax +4.1% -0.9%
And on the currencies, with the exception of the Chinese Yuan ,which is being purposely devalued by the government to help its exporters in the market and counter the effects of the "trade war", other currencies remained stable with the USD strengthening only slightly versus most ....performing as follows...
GBP +0.7% +1.3%
EUR 0.0% +2.6%
JPY +1.3% -0.7%
AUD -0.3% +5.3%
CNY +2.9% +4.7%
As many of you will have seen, the US GDP results for the second quarter of 2018, by far exceeded expectations with an annualised 4.4% increase, when 2.2% was expected. This now means GDP is expected to rise by 3% for the year, a figure not reached since 2005.Unemployment is also very close to a 15 year low and at its lowest ever amongst certain demographics
Mr Trump is of course very quick to claim credit for all of this (despite before taking office once calling the published unemployment rate a "hoax"), his policies have reflected positively on the markets, the US economy is in good shape and its growth outlook rosy.
The world's second largest economy China however has been having a more difficult time. As reflected above, markets are down 13% year to date.
The perception that growth in the US is limited but abundant in China is one that many people hold, yet the above say otherwise.
That's not to say that China is not growing. People I speak to who have visited Shanghai recently talk about a "different world" in terms of its modernisation and the plans and infrastructure which is in place to support this growth seems to be well managed. I read recently that every five weeks, China is putting 9,000 electric buses on the road, thats the equivalent of the whole of London's fleet. One area China had to work on was the effect on the environment that its growth was having and they are dealing with it with huge investment in the likes of electric vehicles.
There are literally millions of ways to make money by investing, and there are also millions of ways to lose money. Luck can play a part but over the long term a small part. As I have said many times no one can predict the future and trying to do so is a futile exercise. Some people make money in property, some in the stock market, some entrepreneurial ventures, some in Crypto currency - and some people lose money in all of these.
When it comes to the stock market, it can be a very tricky place, we saw shares in Facebook fall over 20% in one day earlier this month, thats the risk involved.
These risks however are lessened significantly by using professionals - the landscape is complex and whilst I often speak about a somewhat simple inherent growth story (people in developing countries spending on the same as we do) , to make money and reduce your chance of losing money on a consistent basis, you use experts. . It's the processes, time, experience of good Wealth Managers which give them the edge when putting together portfolios. You can see Tenzing's offering here:
Anyone who held Facebook shares (which is a good investment in my opinion) and lost over 20% of their money last month was not unlucky, they were careless, even arrogant. Non professional investors should not be owning direct equity - looking at stock prices is a full time job so leave it to the experts.
As with all walks of life some people are better at things than others. Dedication and skill are certainly two traits that get you to the top and golf legend Gary Player has these in abundance. Stories go that in practice out of a bunker, he wouldn't stop until he had held that bunker shot three times in a row (not three times, three times in a row) ..so he then does it competition...lucky....I think not