Please find this month’s Market Commentary newsletter which contains our view on the stock market based upon fundamental and technical analysis along with some recommended investments for the current market.
The FTSE finished the month just 14 points away from where it started but that is only half the story. The volatility intra month was extraordinary with the market being down at one point 420 points, or 6.9%. Despite the volatility, we continue to recommend stocks. Retail investors sold $36bn of equity funds YTD driven by US domiciled investors. This compares to buying of $23bn during the same period last year and $349bn for the whole of 2015. It is the worst start for equity fund flows since the beginning of 2008. As a result, their equity exposure should not represent a big impediment for equity markets going forward. This, coupled with very low interest rates justifies a low equity discount rate, making equities look attractive from a valuation point of view.