In August, the dozzi investment committee met to discuss the changing economic landscape and how this may impact our current portfolio positioning.
This update for August incorporates a deep dive into whether we are looking at a Bear Market Rally or the beginning of a Bull Market.
While markets will always be unpredictable, it helps to look a little deeper and separate fact from noise, while using history as a good tool for future guidance.
Bull or Bear Is This the Start of The Next Bull Market or Just Another Bear Market Rally?
Everybody is asking the same question. Not many have a logical answer. Picking turning points is probably the most difficult task confronting any Investment Committee. With this caveat in mind, the aim of this article is to provide some observations as to what has occurred in the past for new bull markets to be established – using historical comparisons as a guide. A range of indicators across three broad criteria – availability of credit, economic conditions, and market conditions – are assessed and ranked in order of conviction. As will be seen, the odds are pointing to this being a bear market rally rather than the initiation of the next bull market. Still, you ‘never say never’ with markets – but you must be a firm adherent of a ‘this time it’s different’ view to strongly believe the worst is behind us and we can once more embrace risk assets (shares, property and the like) again….
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