Tuesday, May 13, 2014

Expect the Unexpected

The first few months of 2014 have proved to be fairly challenging for most investors. Entering the year, there was an almost universally held set of consensus views: equities would perform well,  bonds would suffer as yields rose and the US dollar would strengthen (against the yen and euro in particular) as the Federal Reserve pared back Quantitative Easing (QE). Most economists were optimistic about US prospects, expecting accelerating growth.

But there will always be surprises. The unforeseen escalation of events in the Ukraine as well as the prolonged bout of severe winter weather in the US reminds us of this. Such events have contributed to the ‘surprising’ outcomes in markets so far this year: equities have underperformed government bonds, the US dollar has been lacklustre and US growth has been weaker than expected. Other important factors have been less unexpected but have weighed on markets, including growing concerns around China’s economy and fragilities in several emerging market countries. To read more on this article click on this link  http://www.fanews.co.za/article/investments/8/general/1133/expect-the-unexpected/16004

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