We continue to put on hold any major changes or rebalancing of portfolios. Whilst most markets, but not the UK,  have  recovered strongly, they continue to experience some significant daily swings which is called volatility. Trading during volatile times can create unnecessary risks to portfolios caused by being out of the market for a day or two. You may have read or heard that over the last week the Nasdaq moved by over 4% in one day, which is a lot, and other days the rest of the US market in particular was jumping around by 2 or 3%  We monitor market volatility using an established industry index called the Vix index, but also known as the fear index. This measures investor sentiment through monitoring US options which by their nature are looking to the future. The higher the index, the higher the expected volatility that will be experienced. At the height of the recent crash in March, the index rose to over 80. Around 15-20 is roughly the normal level. We were getting close to 20 but it has recently risen to just below 30. The increase has been caused by a fear that technology stocks and the “FANGS” have become overvalued and continuing fears over global economies and politics.

Property

We note that two property funds have begun to re-open. This is clearly encouraging news. However, we are not expecting this to be the start of a major change in sentiment by the sector from what we can elicit. It could be some time before any normality returns to this sector.