Surviving the 2023 Investment Markets
Surviving the 2023 Investment Markets
February 3, 2023
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If you saw it coming…

In December 2021, if you were fascinated by the financial markets and very interested in economic conditions, you would have noticed that the tone of the market had changed. You would have felt, in your gut, that a perfect storm was brewing.

Of course, there were many economic tells that would have helped crystalize your view of the market direction.

Massive geo-political tensions, supply chain constraints, and rapidly rising inflation was a very clear warning. The market was trading at a huge premium to the 200 day moving average and as we all know over time the market will always revert to the mean. More simply put, stocks were massively over valued and large market bubbles are one of the first signs that a correction is imminent. Debt proliferation, an inverted yield curve and promises of rapidly rising interest rates were some more warnings.

Of course, after decades of incredibly low interest rates inflation took off and the market had to contend with severe structural changes and the withdrawal of financial support from almost every reserve bank in the world.

But most importantly the market itself was warning investors. The leading shares at the time, the famously termed FANG stocks, were becoming very tired and could not achieve new market highs in their share prices. It was clear that the perfect goldilocks economy and the era of low interest rates and low inflation was on its death bed.

The market leaders started to fall and the glamour – no profit yet stocks – fell even faster.

If you saw it coming…

You would have started raising cash quickly – selling highly priced growth stocks, expensive bonds, real estate, unnecessary assets and movables and keeping the proceeds in cash and near cash.

If you saw it coming…

You would have been patient, you would have carefully studied market conditions, worked on new investment ideas and updated your files and research on your favorite stocks and waited for the market to bottom and confirm a new and proven uptrend.

You would have asked yourself – are we there yet? Can we start phasing money into the market? Especially into our favorite shares.

You would have told yourself not to get excited, not to get ahead of yourself. This is the dating phase and not even an engagement. Key technical levels in the market have to hold for the trend to be confirmed.

If you saw it coming…

Fenestra Asset Management did see it coming – and we are ready. Fenestra starts 2023 with over 90 percent of the assets under management in cash and near cash!

If you are not happy with your portfolio performance or would like a second opinion, please do not hesitate to contact Fenestra for a free review of your portfolio.