It’s been a cold, miserable summer. And the weather hasn’t been great, either. China really is slowing down despite the Peking government’s attempts to paper over the cracks; Abenomics is not working in Japan; Greece is falling apart again; US and UK are agonising over whether their economies can cope with an interest rate rise. The list goes on.
The FTSE 100 has fallen for eight consecutive days. By the time you read this, that could have been extended to nine. This week’s fall has topped 3% and may reach 4%.
Yet the UK economy continues its relentless recovery and London-quoted stocks, on the whole, are improving their profits and their dividends. Once again we are seeing solid companies yielding 4% and more.
I have given up hope that the London stock market will turn around this side of St Leger Day on September 12. After that, though, things should start to move in the right direction. Thus two stock market concepts I scorn – sell in May and the Santa Claus rally – will be justified this year.
I would not want to be out of the market ahead of the autumn. The time to buy is before St Leger Day to get ahead of the crowd so you can enjoy an Indian summer.
Travel Business Boosts Ailing Retailer
I’ve looked at buying shares in retailer WH Smith (SMWH) several times over the past few years and each time allowed my antipathy to retailers to get the better of my judgement. Each time I have regretted not making a purchase.
Smiths this week said full year results would be slightly ahead of expectations with the travel business – outlets at airports and stations – again powering ahead while High Street outlets are holding their own. Thus the policies of Kate Swann, the chief executive who turned the once ailing business round, have continued since her departure with pleasing effects.
Strangely, the shares fell 27p on the announcement. They are admittedly up 50% since last October and are one of the few holdings that have risen in value since April. Even so, I was tempted once again and once again chickened out. I have a feeling I will once again regret my vacillation.
Gold - Good for Teeth Not Investment
Whisper it softly, but gold could be on the upward march at last. It reached $1,140 an ounce this week despite being forecast to stay below $1,000 for the foreseeable future.
Regular readers will know that I am no fan of the precious metal – I feel it’s all right in teeth and jewellery but not in an investment portfolio – so if I am relenting a little it must be worth considering.
The media does gold no favours by calling it a safe haven, which it clearly is not. It is a risky gamble on whether more people will come in at higher prices. It does not always rise when trouble breaks out yet it can do well in calmer economic times.
We have certainly had our share of worries, yet gold has been reluctant to get moving. If you think gold’s time has finally come again, just remember it is better to get out too soon before the price stops rising rather than cling on and be left holding it as the price tumbles.
What Fate for the Greek Leader?
Rarely has a prime minister of any country presided over so much in so short a time as Greek leader Alexis Tsipras, who, to paraphrase The Pirates of Penzance, goes to meet his fate in a highly nervous state. Come the middle of September he will be put out of his misery.
Tsipras did not create the crisis and he would never have gained power if the previous government had not reneged on its responsibilities. After playing a difficult hand well, he too lost his nerve, wrecking the Greek economy and his own government in the process.
We thus face another period of uncertainty that casts a shadow over the Eurozone and reminds us that the Greek crisis is nowhere near being solved. Send not to enquire for whom the bell tolls; it tolls for Tsipras, for Greece and for all of us.
