CEO, Saxo Markets UK
Summary: The 2022/23 ISA season has kicked in, and what an excellent vehicle the ISA is to invest GBP 20,000 where all profits are tax free.
Given the Chancellor’s budget this year, it seems that tax free is an increasingly rare beast, so I plan to take full advantage of this year’s ISA allowance.
I have reviewed my investment notes from ISA 2021/2022 when my focus was around inflation, commodities with a focus on agriculture, softs and water, FTSE 100 mid 6000s, gold and general miners and a bit of volatility. In general, these were all good calls except for volatility which was just poor.
This year, the themes I’m focusing on are centered around uncertain geopolitical background, rampant inflation, the longer-term impact of Covid-19, the war in Ukraine and increasing interest rates. All this points to a defensive approach and dollar averaging or investing part of the GBP 20,000 each month, to avoid mistiming the market and top ticking.
My investments will include a big allocation to well managed and mature long short hedge funds. The shorts in their book should help cushion against markets in decline. If your portfolio is overweight Europe and the UK, pick a hedge fund with a European focus.
I will also continue with Commodities but this year I intend to focus on gold miners and gold. I like the defensive qualities of gold and at some point, gold should break out in the face of mounting inflation and uncertainty. To this I will add, a much-overlooked commodity – water. There are water ETFs which provide access to water companies with their defensive qualities and yield.
My overall strategy is to stay confident and if there is a large sell off, I will update my strategy to pick up heavily sold off global equities.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
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