Helmke Sartorius von Bach | Jul 1, 2020 | 0
Be on the winning side and keep out of the crossfire
No too long ago we first heard about the ‘peak oil’ theory and were made to believe that from now on the supply of oil will start to decline.
This was supported with scientific analyses of the largest oil producing areas in the world. Using another source, the picture looks different. Yardeni Research, Inc shows that there are different measures that produce different results. Measuring demand and supply on a 12 month average, rather than a monthly basis, is a more convincing reflection. This does not really support the story of a huge oil glut. In fact it shows that there is still a small short supply on a 12 month average basis, given that the gap between demand and supply has declined.
A few years ago global media focused our attention on the life threatening ozone hole. Have you heard anything about this phenomenon recently? The last I heard, as recent as last week, is that the ozone hole has virtually disappeared. Nowadays the topic everyone talks about is climate change, caused by carbon emissions, and of course it is once again threatening the existence of mankind!
Are we experiencing a media supported global strategy to unsettle mankind, and what does this have to do with investing and financial markets? What would be your biggest threats that could prevent you from achieving your investment objective?
On the macro level, it would evidently be countries that want to, and potentially have the means to challenge you and to break the shackles of global hegemony. On the micro level it’s the threat of being deprived of free access to resources you need, the threat of business competitors outsmarting your own businesses, while at grass roots level it could be a strong globally popular philosophy that gets the masses on the move against your interests.
Taking a longer term view, the investor would want to be on the winning side and should try to keep out of the ‘cross fire’. Being on the winning side, at least for the foreseeable future, is a ‘no brainer’. For the shorter term, just choose the right asset classes. In this regard, spread your risk and try to keep out of the ‘cross fire’.
For the longer term, keeping out of the cross fire means that one should invest in well managed, smart economies that are of limited global strategic relevance. Let Namibia be one of these smart economies that manages to keep out of the cross fire. For the longer term, the whole Eurasian continent is likely to be in the cross fire, pity Europe with its demographic apocalypse that adds to its woes.
In the short to medium term we will see no major changes in monetary policy, probably until early to middle of 2016. We will witness market wobbles as seen recently where a mere faint hint of the US Fed considering a rate hike already sent markets into a tail spin.
We should see a gradual value rebalancing between asset classes as the interest rate environment will gradually be normalised. As a result equity markets are likely to experience only pedestrian performance for years to come, but one should at least expect low real returns as opposed to fixed interest investments that will be shunned until rates have reached normal levels once again.
Download the complete Benchtest fund investment overview for June / July 2015 at http://www.rfsol.com.na/benchmark