Market notes: December 19 2017

Attached as a pdf is one of my regular run throughs of the most important market instruments for a UK investor – essentially keeping tabs on the big macro picture. It is a useful discipline when thinking about asset allocation to stay in tune with the long term picture; not least because it is so easy to be distracted into forgetting the underlying trends by excitable headlines and sudden market spikes and dips. The charts show five-year performance with two trend lines (50 day and 200 day moving averages). The second panel shows short term overbought/oversold conditions (above 70 overbought, below 30 oversold). Bottom line: currently about as good as it gets for an equity investor. It was right 12 months ago to ignore the siren voices saying that a post-Brexit, post-Trump world would produce poor returns in 2017.

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