The latest investment report from Prospect Wealth Management

In summary:

• European Central Bank’s liquidity programme has averted a credit crunch. A major positive for European growth.
• The liquidity programme allows Italian and Spanish debt to be funded “through the back door”. The threat of euro break-up is much reduced – positive for equities.
• US economic data have been surprisingly robust and point to an acceleration in growth. Another positive for equities.
• Equity markets are extremely cheap relative to bonds and cheap or fair value in cash flow terms.
• We have moved to a modestly overweight position in equities.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.

The latest investment report from Prospect Wealth Management

In summary:

• European Central Bank acts as lender of last resort to European banks, calming bond markets.
• UK Gilt prices hit new highs as UK is seen as one of the few safe havens – for now.
• US economy continues to show signs of improving growth, underpinning global stock market.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.

We wish all our readers a Happy New Year.

In summary:

• Rising Italian and Spanish bond yields threaten a renewed credit crunch in Europe.
• New governments in Italy, Spain and Greece offer hope of delivering much needed structural reform.
• The US economy appears to be picking up momentum again after a summer lull.
• Equity markets offer attractive value relative to bonds, though momentum remains negative.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.

In summary:

• UK gilts have been the best performing asset class of the last quarter but corporate bonds now offer attractive value.
• We have raised 6% cash ahead of the outcome of the eurozone policymakers’ deliberations in case a deal falls through.
• Alternative investments have provided excellent protection against the volatility of equity markets.
• Our Deposit Alternative portfolio continues to be a safe haven for those concerned about future market turbulence.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.

In summary:

• Threat of Euro break-up recedes for time being as ECB spends €22bn buying Italian and Spanish bonds.
• US pledge to hold interest rates at close to zero until 2013.
• Japan recovering faster than expected with growth in second quarter down by just 0.3%.
• Stock market valuations cheap in Europe and Japan.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.