In 1949 Benjamin Graham published one of the most influential books on investing called the ‘The Intelligent Investor’. In it, he laid out the principles for what has become known as ‘Value Investing’ - the concept of identifying true intrinsic value in the market.
Since US Federal Reserve (‘Fed’) Chairman Ben Bernanke’s testimony to Congress on 22nd May, when he indicated that the Fed may be ready to reduce monetary stimulus, Emerging Market (‘EM’) currencies such as the Indonesian rupiah, Indian rupee and Brazilian real are down 19%, 18% and 14% against the euro. This not only demonstrates how interconnected global financial markets have become, but also the unintended consequences of central banks’ unconventional monetary policies during the crisis.
There is a new found sense of optimism in the Irish commercial property market. Since the beginning of 2012, there has been a surge in investment activity. Transactions worth almost €600 million were completed in 2012, the highest level since 2007. This figure was surpassed in the first six months of 2013 and the projected outlook for the year is in the range of €1.2 billion to €1.5 billion. The top end of this range would compare to 2006 and 2008 - two of the top three years of the Celtic Tiger.
Investors and savers who have been able to achieve a reasonable rate of return on cash deposits in recent years are now having to look elsewhere for yield.
The pace at which Asian nations have transformed themselves from peasant economies into industrial powerhouses has been remarkable. When assessing the future potential for the region, the numbers are unparalleled.
Having just endured the worst recession in the history of the state, encouraging signs have emerged that indicate Ireland is slowly rising from the ashes.
America is gradually emerging from the global financial crisis. Despite predictions of its demise as the world’s greatest superpower, we expect the US to reassert its economic and financial prowess over the next decade.
Trying to predict the future can be a very humbling exercise. Just ask Thomas Malthus. Confronted with large scale population growth at the end of the 18th century, the eminent Cambridge economist predicted the world would essentially consume itself as there was not enough food to feed the growing population, which would lead to widespread famine, disease and ultimately societal decline. Although similar apocalyptic prophecies still exist today, the world’s population has grown to over 7 billion compared to just 1 billion in 1800, and life expectancies keep rising.
1994 was a year which many bond investors would like to forget, as bond markets crashed and many investors suffered huge losses in what subsequently became known as the ‘Great Bond Market Massacre’. Many now fear a repeat of 1994 with 10-year US Treasury yields rising by almost 1% since the start of May, eerily matching the early stages of the 1994 sell-off.
Back in the 1980s, Japan was the role model for global economic policy makers. It was seen as having achieved the most effective mix between free market and social structures and had the best potential for longer term sustainable growth rates.