Investment Committee – June 2022

Diversification is actually what we call conditional correlation. This is more evident this year, with some asset bubbles deflating, led by bonds. Debt/equity and debt/GDP ratios are coming higher despite the numerator remaining constant, because of stock prices and growth struggling.

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Investment Committee – May 2022

COVID and the Ukraine/Russia conflict are being accused of the recent spike in global inflation. This debate cannot exclude equal blame for the previous years’ excessive money printing and debt creation. Inflation distorts asset prices and given the excessive amount of paper-wealth as opposed to real wealth, rotation from one to the other (for example, from technology stocks to commodities) has this year become a game of musical chairs.

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Investment Committee – April 2022

The Committee noted the upcoming Easter holidays that usually work as a volatility absorber from the markets and it discussed how bonds may be appealing as a tactical trade after their March sell-off.

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Onwards and upwards or temporary euphoria?

We believe taming inflation has become a principal target for the US Federal Reserve. The Administration has just released one third of its Strategic Petroleum Reserve (approximately 180 million barrels) to restrain oil prices and US strategic reserves now stand at their lowest level since 1984. The exact plan is to release 1 million barrels of oil per day over a period of the next six months.

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