We are in “an investment environment that is simultaneously attractive and terrifying”, Cheah Cheng Hye, the co-founder of one of Asia’s largest independent fund managers, tells Bloomberg.
Capitalism is in a systemic crisis: too much financial engineering means that we are just borrowing from the future; giant monopolistic companies dominate economies around the world and stifle competition; and monetary policies based on too much liquidity and negative interest rates are contributing to a gulf between a very small, wealthy elite and the majority of people who are seeing no increase in their income. “This is fomenting social crises and unrest all over the world.” And tribal politics are making matters worse, threatening globalisation and free trade.
At the same time we have “bubble economics”. Central-bank money printing is distorting prices and pushing up markets. It’s a dangerous atmosphere – “but one where you still need to keep investing”. Abundant liquidity and “zero tolerance for market failure” by central banks and governments “imply that the party will continue for quite a while”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
So investors should continue to hold equities, including China, where Cheah believes the completion of the first phase of a trade deal with the US will be positive for the renminbi. But since we can never know exactly when the next crisis will hit, it’s prudent to hedge these more aggressive investments by still keeping part of a portfolio in defensive assets, such as gold and cash.
-
House prices are falling in London but how does it compare to the rest of the UK?Advice The capital remains the most expensive part of the UK to buy a property, but it isn’t being as badly hit by the housing market slump. Where are London house prices heading?
-
Will a Santa Rally provide festive cheer for investors this year?
News Equities often get a seasonal boost during December - will there be a Santa Rally in 2023?
-
Halifax: House price slump continues as prices slide for the sixth consecutive month
UK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?
UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investments
Investors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodation
Student accommodation can be a lucrative investment if you know where to look.
-
Best investing apps
We round up the best investing apps. Looking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go?
-
The top funds to invest in - November 2023
Tips Investors are focused on income strategies and FTSE heavyweights. We look at what investors have been adding to their portfolios in the last month
-
The world’s best bargain stocks
Searching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in Britain
New research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
