It is easy to get restless when the news picture is characterized by war, interest rate talk and fluctuating markets. In the last week, the central banks, such as the Federal Reserve, the ECB and the Bank of England, have all chosen to keep interest rates unchanged. It was as expected, but still there is a lot of information between the lines.
Because there is no doubt: the conflict in the Middle East affects the economy. Higher energy prices can mean higher inflation and slightly lower growth going forward. At the same time, we are now starting to hear cautious signals about possible de-escalation of the Iran conflict The market is reacting quickly to such signals – both up and down. Oil prices have been volatile, but currently seems to have stabilized around 105–110 dollars a barrel. It seems to calm the market somewhat.
At the same time, it is important to look at the big picture. The market this year is far from straight forward, and the differences are large:
- Oslo Børs is up a whopping 17% so far this year
- Most active Norway-funds are up between 0–10 %
- While the U.S. is down about 4.5%
- Big tech companies (the so-called “Mag7”) are down 10–20%
- And not least: most currencies have weakened by 5–7% against NOK.
What does this mean in practice? Yes, it’s hard to get it right in the short term. The market turns quickly, and what worked yesterday doesn’t necessarily work today.
That’s exactly why we do what we do.
We’ve kept a balanced and cautious approach, and are utilizing volatile periods to adjust and rebalance portfolios. The result so far this year is performance around “break even”, in a period where the largest global funds are down 10–15 %. It’s not random. It’s about good diversification of investments and a clear philosophy: don’t bet everything on one idea, one market or one trend.
What do we do going forward?
We follow the situation closely and make adjustments when necessary, but we do not allow ourselves to be controlled by short-term headlines or emotions. The market rewards patience – does not panic
And perhaps the most important thing right now:
Although it feels uneasy, it is also in such periods that the basis for future returns is laid. Get in touch for a good discussion and/or if we can be of any assistance.
Rgds, Even
