Investment Clock insights

Buying the dip in equities

Trevor Greetham

22 August 2017

After months of calm, investors are starting to get rattled by geopolitical events, with the stand-off with North Korea and protests in the US causing disquiet. As a result, our contrarian sentiment indicator is flashing its first ‘buy’ signal since the French elections in April. Previous ‘buy’ signals were triggered by the China devaluations of 2015/16, the Brexit referendum, and the election of Donald Trump, all of which were good entry points to buy stocks. It can pay to buy when others are fearful and we are starting to increase the equity overweight positions in our multi asset funds. Stocks have been tearing ahead over the last eighteen months and valuations are starting to get a bit stretched. However, macro-economic data remains supportive, with global growth continuing at a reasonable pace, inflation pressures easing and interest rates low.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.