Market Update June 2020
We are three months on from the start of lockdown, and rules are now starting to relax, with the government eager to get the economy going again and stock markets having risen significantly since the drops in March.
The Aventur portfolios have performed spectacularly overall; falling less than the average IFA portfolio (AFI Cautious, balanced and Aggressive strategies shown below) but also rising more in the rebound, this covers the last three months:
At Aventur, we believe a lot of this success is down to diversifying the portfolios globally rather than focussing on the UK. The addition of Gold, Tech and Biotech holdings has also helped reduce dramatic falls during this period. Nobody knows where markets will go from here, only that it will be one of two ways; up or down. Behind the scenes the Bank of England is predicting the biggest recession in 300 years, and quite frankly, this does make sense. The world’s businesses have not shutdown like this before so it is likely there will be more negative periods for the stock market in the next few years. These drops may go lower than we have seen in the last few months, or potentially lower than the dot com crash or 2007 financial crisis. There is also the opposing argument that if life gets back to normal, and if Governments handle things well, there may not be further drops in the market.
Either way, we invest with long term goals in mind and factor in regular recessions into our plans. That’s why it’s important to stick with the long-term plan in mind and not try to time entry and exit to the market. We have been through recessions and difficult times before, and we are likely to again. Take a look at the history of Bull and bear markets throughout the last 100 years, which clearly show periods of rises and falls in the market:
In closing, we want to reassure you that we will continue to manage the exclusive Aventur Portfolios regularly and will keep you updated as things progress. If you have any questions please do speak to your dedicated Financial Adviser who will be able to discuss this further with you.
Managing Director & Head of Aventur Investment Committee