Reporting in from the beach this week. Some people have been kind enough to have me to stay and have put me up in the loft of their bach. It is on the waterfront and is open air. At night, when trying to sleep, the ghostly surf deafens me as
Sleepy summer markets lifeless
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Caroline Ritchie.
This, verbatim, from UBS: "Simply put, barring an unforeseen external shock or a recession, if earnings continue to improve, 2016 should be a positive year for US equities. Regardless, we continue to expect further volatility -- which means higher risk, both upside and downside."
What this says, essentially, is nothing. It wavers: shares go up, shares go down, it all depends. A primary school child could have said it, except they do not teach children about shares at school, which is a shame.
So, from UBS, I guess, a bit of sitting on the fence, just reading between the lines.
And they are probably right to hedge their bets, these big guys, as they do every year. They are playing a long-term game. No good ever came from large financial organisations shooting their mouths off in all sorts of funny directions.
They play conservatively, if a bit waffly, and so should you. Once correctly positioned for your situation, you'll survive nearly anything the markets can throw at you. Balance and fortitude are the best portfolio ingredients (if a tad boring), along with my favourite -- sticking to the plan.
Fortune telling? Not so much. Rampant staring into the future can lead to skew and bias, which is not helpful. Repeatedly reading a strong predictive narrative over and over tends to warp the brain and what was originally stated as pure opinion tends to get interpreted as fact. Avoid.
Personally, I'm with Chinese philosopher Lao Tzu -- "He who knows does not predict, he who predicts does not know".
No amount of crystal ball-gazing will make any difference in the end, so for now just enjoy the moment, the lazy sunshine and the holidays.
- Caroline Ritchie is a former AFA, sharebroker & portfolio manager. She runs Investment Stuff, an investment coaching service. Visit her at investmentstuff.co.nz. Statements in this column are not financial advice.