In September, global investment markets experienced a rise in volatility and uncertainty. During this period the dozzi investment committee recommended changes to your portfolio which took advantage of these conditions to begin averaging into growth investments. This update incorporates our analysis of markets, inflation and the long-term road to recovery.
US CPI Deconstructed
Unquestionably, the economic news is likely to get decidedly worse before it gets better. Still, at some point we will need to move away from our present conservative AA (asset allocation) stance and back toward a more neutral (and then aggressive) AA stance. Integral in this decision are the actions of central banks and when they are likely to start cutting (rather than raising) interest rates. Determining central bank behaviour is simpler than what a lot of market commentators would have you believe. Central banks have two prime objectives – full employment and keeping inflation low and stable. The former is certainly not a problem at the present juncture, the latter very much so. The line of reasoning is simple – if you want to know what central banks are going to do, you need to have a view on what inflation is going to do. This thematic aims to provide insight as to what we feel will be the key determining variable of market dynamics over coming months – US CPI. We apologise for the US centricity of this report but given the dominance of US capital over global financial markets, if there is one economy / one variable to focus on at the present time in guiding our AA decision-making it is US CPI…
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