Daily Archives: August 9, 2012

James Mackintosh Stocks are dancing in the Street

August 9, 2012 6:59 pm by James Mackintosh

There are no summertime blues for the stock market, at least not yet. The S&P 500 may have briefly dipped back below 1,400 today (annoyingly after the video below was recorded) but the rally has delivered 10 per cent returns since shares bottomed out at the start of June.

Can it last? History is not kind to rallies which start in the summer: what starts in the summer tends to end in the summer.

The chart below highlights four summer rallies since 1970, defined as consecutive monthly gains in June, July and August, to the first of the next month. Change the definition slightly and there were also summer rallies in 2003, 2006 and 2009, but the story remains identical. Read more

Posted in Equity markets, The Short View |

James Mackintosh Half a lost decade: lessons for investors

August 9, 2012 12:14 pm by James Mackintosh

An investor given perfect foresight of how the world’s economy’s would perform after the credit crunch began five years ago today would still struggle to predict some of the most important market action.

Today’s Short View video explores some of the surprises of the last half-decade. The biggest surprise of the next five years would be if we ended up without a Japanese-style lost decade – and the result would be disastrous for bondholders positioned for ongoing economic gloom.

The newspaper version of Short View discusses the shifting patterns created by the changed bond/equity correlations and the hunt for yield.

Here are charts showing the world’s asset returns over the past five, fearful years: Read more

Posted in Capital markets, Equity markets, The Short View |