Cambridge Weekly Update – 8th July 2019

Liquidity drives stock markets to new highs – for how long?

The highly anticipated meeting between US President Trump and China’s President Xi Jinping at the G20 summit in Osaka came and went – with somewhat of a damp squib outcome compared to some sky-high expectations of an end to the ongoing trade war. Yet the mere intention to re-engage in trade negotiations and not engage in further proliferation of trade hostilities appeared enough to push many equity markets around the world to new historical highs.

Follow the money – central banks’ money

Only during moments of panic during the 1980s to the early 2000s would we worry about Herr Pohl of the Bundesbank or Alan Greenspan at the US Fed. Markets preferred it when monetary policy makers only set the longer-term framework, but otherwise played second fiddle to business fundamentals. Since the late 2000s the impact of monetary policy has become significantly more important to the world’s economy. Inevitably the people making the policy are the subject of a lot of discussion, and not just among financiers.

Property & Private Equity – Do they offer diversification?

Leading on from our article on diversification last week, we aim to start sharing more insights on alternative investments and our approaches to assessing their value in investment portfolio construction. Many investors seek to diversify their portfolio through alternative investments, hoping to reduce capital volatility without losing investment return potential. These come in several forms: Real Estate (bricks & mortar property), Hedge Funds, Private Equity (PE), commodities, Infrastructure, and increasingly even more exotic real assets such as wines and art.

Read the full commentary here