Another month has passed by in what seems like a blink of an eye. Holiday season is pretty much coming to an end so will this mean the end to the somewhat passive market environment we have had of late?
During the month of August we saw the following movements
FTSE +0.9% (YTD +8.6%)
Dow -0.2% (YTD +4.5%)
Nasdaq +1.0% (YTD +2.9%)
Nikkei +1.7% (YTD -11.2%)
SSE +4.3% (YTD -12.9%)
Dax +2.5% (YTD -1.4%)
So a little bit of a bounce back in China but otherwise another modestly positive month. Low inflation, the delaying of interest rate rises and lower trading volume are factors as to why these results are what they are.
On the currencies, we saw the US Dollar strengthen slightly against other major currencies up in the month as follows:
GBP 0.7%, EUR 0.1%, JPY 1.9%, CNY 0.7% AUD 0.9%
Historically September and October are the most volatile months in the markets so if history has a habit of repeating itself then perhaps we are in the calm before the storm….Certainly we can expect some movement what with the most interesting Presidential election I can remember looming, can I be sure how the markets will react to Trump / Clinton victory…. no but whatever way it goes it will be a reaction based on emotion.
Seeing past the emotion is the key to successful investing, buying quality gives yourself the best chance of gaining long term capital growth from your investments.
If that quality is Magnum ice creams (Unilever), Gucci handbags or quality brains such as Terry Smith (up 23.3% YTD) or Nick Train (up 21% YTD) you wont go far wrong. The latter of those managers holds his shares for an average of 18 years…so choose carefully and choose quality