Feature article:
Macro issues dominate investor sentiment - Some basics for investors
The big topics in the investment world at the moment seem to be macroeconomic. With that in mind, we thought it would be useful to revisit some of the basics of the terms being used in the current environment, and to remind investors of the things to look out for (indeed, many younger investors may not have come across some of these influences in their investing lifetime):
• Recession does not affect all sectors and companies equally.
• The depth of a recession will vary among sectors, as will the timing of the impact.
• Gross Domestic Product (GDP) is the standard way to measure economic success, but some have promoted a “happiness index”.
• The full impact of higher interest rates takes time, perhaps years, to show.
• The devaluation of growth stocks is due to more than just a change in the zeitgeist.
• Inflation favours equities over bonds, particularly for companies that are price-setters, rather than price-takers.
The Bank of England will struggle to get inflation down as fast as it hopes.
05 Sep 2022
The Hardman & Co Monthly: September 2022
Volta Finance Limited (VTA:LON), 490 | Tissue Regenix Group plc (TRX:LON), 62.5 | Shield Therapeutics Plc (STX:LON), 2.0 | Real Estate Credit Investments Limited (RECI:LON), 115 | Pantheon Resources plc (PANR:LON), 26.8 | Oakley Capital Investments Ltd Registered (OCI:LON), 466 | International Biotechnology Trust PLC (IBT:LON), 658 | ICG Enterprise Trust PLC GBP (ICGT:LON), 1,193 | Advanced Oncotherapy Plc (AVO:LON), 1.9 | Arbuthnot Banking Group PLC (ARBB:LON), 1,080 | Cizzle Biotechnology Holdings PLC (E7F0:FRA), 0 | Fidelity Asian Values PLC GBP (FAS:LON), 495 | Fidelity China Special Situations PLC (FCSS:LON), 201 | Fidelity European Trust PLC GBP (FEV:LON), 392 | Fidelity Japan Trust PLC (FJV:LON), 181 | Fidelity Special Values PLC GBP (FSV:LON), 290
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The Hardman & Co Monthly: September 2022
Volta Finance Limited (VTA:LON), 490 | Tissue Regenix Group plc (TRX:LON), 62.5 | Shield Therapeutics Plc (STX:LON), 2.0 | Real Estate Credit Investments Limited (RECI:LON), 115 | Pantheon Resources plc (PANR:LON), 26.8 | Oakley Capital Investments Ltd Registered (OCI:LON), 466 | International Biotechnology Trust PLC (IBT:LON), 658 | ICG Enterprise Trust PLC GBP (ICGT:LON), 1,193 | Advanced Oncotherapy Plc (AVO:LON), 1.9 | Arbuthnot Banking Group PLC (ARBB:LON), 1,080 | Cizzle Biotechnology Holdings PLC (E7F0:FRA), 0 | Fidelity Asian Values PLC GBP (FAS:LON), 495 | Fidelity China Special Situations PLC (FCSS:LON), 201 | Fidelity European Trust PLC GBP (FEV:LON), 392 | Fidelity Japan Trust PLC (FJV:LON), 181 | Fidelity Special Values PLC GBP (FSV:LON), 290
- Published:
05 Sep 2022 -
Author:
Martin Hall | Mike Foster | Mark Thomas | Keith Hiscock -
Pages:
31
Feature article:
Macro issues dominate investor sentiment - Some basics for investors
The big topics in the investment world at the moment seem to be macroeconomic. With that in mind, we thought it would be useful to revisit some of the basics of the terms being used in the current environment, and to remind investors of the things to look out for (indeed, many younger investors may not have come across some of these influences in their investing lifetime):
• Recession does not affect all sectors and companies equally.
• The depth of a recession will vary among sectors, as will the timing of the impact.
• Gross Domestic Product (GDP) is the standard way to measure economic success, but some have promoted a “happiness index”.
• The full impact of higher interest rates takes time, perhaps years, to show.
• The devaluation of growth stocks is due to more than just a change in the zeitgeist.
• Inflation favours equities over bonds, particularly for companies that are price-setters, rather than price-takers.
The Bank of England will struggle to get inflation down as fast as it hopes.