“Wind of Change” – Investment viewpoint from Punter Southall Wealth CIO Thomas Becket

By Thomas Becket, Chief Investment Officer at Punter Southall Wealth

As I reflect on the last eighteen months, it is astonishing how much transformation there has been for all of us as global citizens and investors. In many ways, though, the world changed back in 2008, with the economic destruction wrought on the West by the global financial crisis and the “crossing of the Rubicon” by global central bankers and governments, with their monetary and fiscal largesse. I discussed this with our Chief Executive Officer the other day and we mutually opined that despite our combined near sixty years of investment experience (I’ll allow you to guess at the balance of those years between us), there were many occurrences and dynamics in markets today, in no small part down to the financial experiments unleashed in response to the slower post-crisis global growth, that we struggled to understand.

Is it possible that our mental struggles are down to the fact that we have become investment dinosaurs? Maybe it is because the “game” has changed? Or perhaps it is that there are so many short-term distortions created by those hyperactive central bankers and politicians, as well as shifting global trends, that we need to look through the current uncertainty and remain wedded to a longer-term investment philosophy. It could be a combination of all three of those answers and to come to a worthy conclusion, we must address the spheres of geopolitics, politics, monetary policy, inflation and market valuations, which we will do today.

The “turbulent twenties” moniker remains apt

Two years ago, when we outlined our thoughts for the decade ahead, we wrote that it could suitably be named the “Turbulent Twenties”. Of course, this view had nothing to do with some prophetic forecast of the COVID pandemic and global governments’ handling of the medical crisis that has enveloped the world in the opening innings of this decade, but was instead built around a view that the world was likely to suffer from a continuation of geopolitical, political and social-economic shifts that were rupturing the relatively stable period the world had enjoyed since the end of the Second World War. If anything, beneath the obscuring fog generated by the COVID crisis, the first eighteen months of this decade have hardened this view.

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