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
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
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This blog is about asset allocation at the global level. It is an ongoing attempt to explain why investors and markets behave the way they do.
John Authers officially takes the "Long View", while James Mackintosh takes the "Short View" when it comes to investment decisions. In practice both of us end up taking both long- and short-term views, and occasionally disagreeing with each other; all comments and disagreements are very welcome.
James Mackintosh is the Financial Times' Investment Editor, writing and presenting the daily Short View column and video. In 16 years at the FT his posts have included comment editor, motor industry editor and hedge funds correspondent, as well as spells in the Parliamentary lobby and Paris. He was the first reporter hired for FT.com, joining two weeks before it launched.
James has a degree in philosophy and psychology from the University of Oxford, where he spent two further years in post-graduate study of philosophy. If he wasn't here, he'd be skiing.
John Authers is the Financial Times' Senior Investment Columnist, writing the Saturday Long View and a regular Monday column. In a 22-year career at the FT, his previous posts have included global head of the Lex column, investment editor, US markets editor, Mexico City bureau chief and US banking correspondent. His latest book is The Fearful Rise of Markets.
John has a degree in Philosophy, Politics and Economics from the University of Oxford, and an MBA from Columbia University. Perhaps more interestingly, he captained the highest scoring team in the history of University Challenge while at Oxford, and also once sung in Pavarotti's backing choir.