Investors have been banking profits and positioning their portfolios for an escalation in the “Trade War”. Panic and fear haven’t gripped the market gauging by the increase in the VIX over the past few days but that could all change with further tit-for-tat tariff increases. 

Investors could generate significant returns waiting for the VIX to reach 25 before buying into the market, this signals ‘near maximum’ pessimism as investors get sucked into the market noise. 

President Trump won’t let his “Trade War” derail his biggest barometer of success, being a bullish stock market that has increased almost 30% since winning the presidency.  

Looking beyond the noise to the fundamentals, highlights a lot to be positive about. Global companies (using the S&P500 as a proxy) have reported increased earnings, increased sales and have positive earnings outlooks in Q3 and Q4 of 2019.  

Investors should be buying into the market slowly, starting today, to position their portfolios for 2019. It should be the year the JSE escapes it’s multi-year phase of low returns. 

 The week ahead: 


Other Economic data releases of interest… 


Invest in the UK with protection from a “Bad” Brexit 

Investec have introduced the FTSE100 Auto Call, a five-year structured product paying 18% per annum if the index is positive. The product can mature (Auto Call) if the index is positive on the third, fourth and fifth anniversaries provide the index is positive. You could receive 54% after year 3, or 72% or 90%, after year 4 or 5 respectively. That’s even if the index is up just 1%. 

Contact us before 29 May to invest in the FTSE100 Auto Call.