deVere Group - International Investment Strategy

International Investment Strategy

deVere Investment Strategy aims to provide clients with a comprehensive picture of the global economy and regular updates on current stock market and fixed income trends, in order to assist investors in making informed investment decisions. It is headed by Tom Elliott, deVere's International Investment Strategist, who produces regular videos and blogs on a wide range of topical investment issues, and regularly speaks at seminars for clients at deVere offices around the world.

The core-satellite approach to investing has several advantages over buying a multitude of separate, high risk investments. The bulk of the portfolio is handed over to a professional multi asset investor, who is qualified to match expected returns with expected levels of risk. The satellite investments allow the client to try to 'beat' the market with higher risk investments, but total portfolio risk is reduced through setting a limit on the size of the satellite allocation relative to the core.

Note: The information contained in this chart is for general guidance on matters of interest only. The deVere Group disclaims any responsibility for content errors, omissions, or infringing material and disclaims any responsibility associated with relying on the information provided herein.

Tom Elliott

International Investment Strategist

Tom Elliott is the deVere Group's International Strategist. His role is to help the Group's clients to better understand the economic and political influences that drive capital markets, which in turn drive investor returns.

Tom, formerly an Executive Director at JP Morgan Asset Management, has 25 years experience in the financial sector.

He is currently a visiting lecturer in the department of political economy at King’s College, London.

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Tom Elliott
Recent Broadcasts
Video
August 30, 2017

Why Invest in Bonds?
Tom Elliott

Bonds continue to be a valuable source of diversified returns within a multi-asset portfolio.

Older posts

Stock market investors should not fear the new tone coming from central banks
With inflation at or below central banks target rates in all the major economies except the U.K, the current market fear of a coordinated tightening of global monetary policy appears unwarranted. More credible risks to stock markets include the risk of a credit crunch in China, some over valued risk assets such as US tech falling out of fashion
July 06, 2017

U.K politics: chaotic, but potentially good for investors
In view of the chaotic state of the U.K government following last week's general election, investors might be surprised at how little sterling has fallen and U.K stock markets have been affected. This may reflect the fact that stronger economic growth is forecasted under a soft Brexit, which now appears possible, and with an easing of fiscal austerity.
June 13, 2017

Should we be concerned about low volatility in capital markets?
Tom Elliott explains why fundamentals are still good for stocks, and why any market correction over the coming months is likely to be temporary.
May 18, 2017

Article 50 and the UK Stock Market
The forthcoming Brexit negotiations will focus on the exit terms and the status of nationals working abroad. In all likelihood a new replacement U.K / E.U trade agreement will not be in place by end of March 2019, leaving the U.K to conduct its trade with the E.U under WTO tariffs. As this becomes apparent, shares in domestic-focused companies may suffer relative to those of FTSE100 multinationals.
March 24, 2017

Outlook for Capital Markets in 2017
Tom Elliott identifies Donald Trump's fiscal stimulus of the U.S economy as potentially the single most important economic theme in 2017, with implications for global capital markets.
January 04, 2017

Video Archive >>

Blog
September 04, 2017

Investment Outlook
Tom Elliott

Near-term market sentiment: The FTSE All World index rose in August, for the tenth consecutive month. But we begin this week on an uncertain note, after the weekend’s news that North Korea has tested a large hydrogen bomb underground. Its nuclear missile program is once again rattling investor confidence. With U.S military options limited (and its Japanese and South Korean allies firmly against a pre-emptive strike), all eyes are on China. Will it oblige the U.S and tighten trade restrictions with North Korea, and so risk an economic collapse of its neighbour and a flood of refugees into China? Meanwhile there is a sense that the further the U.S Department of Justice delves into Trump’s Russian links, the more likely it is that Trump will himself look to distract media attention by baiting North Korea.

The good news is that, despite last week’s upgrade to U.S second quarter GDP growth data (from 2.7% to 3% annualised), and strong Chinese factory output numbers on Thursday, U.S, Chinese and European monetary policy looks set to remain loose and so to continue to support risk assets.

Weaker than expected August jobs growth in the U.S, and weekly earnings growth stuck at 2.5% y/y since April, both suggest limited inflation pressure coming from the labour market and the Fed may yet abandon the penned-in December interest rate hike. The ECB, meeting this Thursday, looks to be as far away as ever from tapering its asset purchase program since a strong euro (at $1.20) is a deflationary force that as a similar effect on the economy as a rate hike might. Draghi will not want to repeat the ECB’s 2011 error of tightening policy too fast, too soon, and ending the incipient euro zone economic recovery.

North Korea longer term outlook: China is North Korea’s only ally in the region, and we can assume that its patience with President Kim is becoming thin. But it too has few options. This problem may well just rumble on, with eventually the U.S and its allies learning to accommodate North Korea as a nuclear power. Similar to the emergence of China as a nuclear force to the frustration of Russia and the U.S in the 1950s. After all, it is not actually in President Kim’s interest to use nuclear missiles, because to do would invite an overwhelming response and probably the end of his family’s rule. But in the meantime, we can expect sabre rattling from North Korea and the U.S to create occasional bouts of market volatility.

Can stock market gains persist? Yes, so long as the risk-free rate remains low (by which we mean so long as bank account cash rates and core government bond yields continue to offer dismal returns to investors). With central banks in no rush to raise overnight rates, and global inflation still relatively subdued, the returns from cash and core bond markets are unlikely to improve over the coming year at least. This supports assets that can produce a yield, and that will respond positively to rising GDP growth, such as equities. But some asset classes do appear overvalued in relation to their risk, not just Argentinian 100 year bonds but parts of the U.S high yield market and possibly also the leading quoted U.S tech stocks. In view of the low risk-free returns available, any correction in these markets is unlikely to trigger an across-the-board sell-off of global stock markets or investment grade bonds, but merely see the proceeds of sales re-invested in lower risk (but still yield-producing) stocks and bonds.

A balanced fund for the long term. The chart below shows a typical long-term balanced portfolio based around 60% global equities and 40% global bonds. Financial history shows this combination to offer good returns relative to risk (ie, volatility). Investors should try to be as diversified as possible, perhaps using the 60/40 model as their guide. Multi-asset funds based on this principle are available, often with different ratios of bonds and equities depending on the level of risk suitable for an investor. Note that the chart shows neutral weightings for the long-term investor, it does not incorporate the near-term weighting suggestions of the previous paragraph.

Older posts

Investment Outlook
August 13, 2017

Investment Outlook
August 01, 2017

Investment Outlook
July 18, 2017

Investment Outlook
July 03, 2017

Investment Outlook
June 20, 2017

Blog Archive >>