Investment Adviser discretionary management correspondent Matthew Jeynes asks the judges of the Investment Adviser 100 Club awards for their predictions for the next three months and the long term.
Lee Robertson - Investment Quorum
Three-month outlook: Bearish
-There are still issues around southern Europe and really conflicting messages from the UK in terms of data, especially around the prospects of a triple-dip recession. Hedge funds and algorithm-based investors might take some profits in the short term based on these factors, which may impact on the market.
Long-term outlook: Bullish
-Momentum is back behind equities. Everyone has woken up to the fact that there is little value in bonds. Investors should be ready for a bit of shock, but long term, we are pretty bullish on markets, and equities in particular.
-Everyone has been looking for income and that has made high yield pricey and even some of those high-yield bonds are not the quality that they should be. Investors should broaden their diversification as there isn’t one particular area that is that attractive – it’s a reversion back to why you used to invest in fixed income in the first place, as a diversifier from equities.
-Fixed income has been completely skewed by quantitative easing, performing as it should not have performed, and I think we will have some short-term shocks within the equity market.
Edward Allen - Thurleigh Investment Managers
Three-month outlook: Neutral
- I think the next three months could be difficult to call for equity markets – we have had information from some researchers who are very bullish on the short-term outlook and others who are very cautious. Are we in the midst of a full-on asset rotation from equities to bonds or are we set for a pullback? It is very uncertain.
- Tactically we have been buying back into Europe – the news from the continent will continue to be dire, but it has been lagging the US and emerging market and is still the cheapest market.
Long-term outlook: Bullish
- We are very positive, so much so that if there is a pullback in markets then that could be an interesting buying point.
- Our long-term view is that we want to stick to a GDP-weighted portfolio, which is obviously a moving feast, as you will have much more in China and India within a few years’ time but we are happy with that, though we play it somewhat through developed market multinationals that have plenty of exposure to emerging markets.
Richard Leigh - London & Capital
Three-month outlook: Neutral
- The past three months have been about re-pricing risk from 2012 and they have now receded. The next three months are a question of how long that risk re-pricing can keep going and how long the rally can keep going.
- In the next three months other funds will spur risk assets further, there will be some support, especially from the policy backdrop, and that means a sell-off is unlikely.
