vestact posted: " Market Scorecard US markets had a decent day yesterday, with the indexes ending slightly lower, but Vestact portfolios marginally higher. The S&P 500 was flat for the month of May, thanks to last week's spectacular rally. The tech-heavy Nasdaq" Vestact - Money with a dash of funny
US markets had a decent day yesterday, with the indexes ending slightly lower, but Vestact portfolios marginally higher. The S&P 500 was flat for the month of May, thanks to last week's spectacular rally. The tech-heavy Nasdaq was about 2.1% down for the month.
In company news, Unilever surged 9.9% after the fast-moving consumer goods company said it would add activist investor Nelson Peltz to its board of directors. Some beaten-down stocks traded higher last night, including Amazon, Netflix, and Zoom.
In summary, the JSE All-share gained 0.19%, the S&P 500 fell 0.63%, and the Nasdaq gave back 0.41%.
Our 10c Worth
One Thing, From Paul
The US market has been very unpleasant in 2022. From the start of the year until now, our model portfolio has declined by 25%. That's awful for those who've been invested with us for a while, and even worse for those who just signed up.
Our advice will always be this. Keep calm and carry on. Accumulate quality holdings and wait. Things do seem to be improving lately.
As Morgan Housel says: "You're not proven until you've survived a calamity. The most reasonable plan is planning on your plan not going according to plan. Progress happens too slowly to notice, setbacks happen too fast to ignore".
Jason Zweig might have been describing Vestact clients here: "Wall Street views individual investors as a herd of naive, unrealistic optimists who chase hot performance in good times and flee stocks at the first sign of trouble. In truth, many private investors are methodical and thoughtful. They have been toughened by their experience of the markets' ups and downs, much as steel is made stronger by tempering it through heating and cooling".
Byron's Beats
Inflation is high and there is political instability all around the globe. This should be gold's time to shine, but it hasn't. After peaking in March, the gold price is basically flat for the year. You would have been better off sitting in cash.
US treasuries have also had a bad year. Remember, when yields rise, bond prices come down. The iShares 7-10 Year Treasury Bond ETF is down 9% year to date. If you had a portfolio that was 60% stocks and 40% bonds you would have still felt big pain this year.
I have two points to make here. The first is that there has been almost nowhere to hide during this wipe-out. That's fine, because you need to suck up some pain to make the gains. My second point is that asset prices don't always behave the way they are "supposed" to. You might correctly predict certain macroeconomic outcomes, but the way you positioned yourself was completely wrong.
Investing is hard, especially at times like these. That's why you need to have a plan that is tried and tested and then stick to it. Ours is to buy quality and hold. Most well-thought-out plans do work if you give them a chance to play out.
Michael's Musings
It's truly depressing to read South Africa's unemployment statistics. We have the worst unemployment rate on a Bloomberg list of 82 countries. Stats SA released our Quarterly Labour Force Survey yesterday, which showed some minor improvement on the employment front.
Our official unemployment rate dropped from 35.3% to 34.5%, with the economy creating 370 000 jobs in the first quarter of this year. The number of unemployed people was reduced by 60 000. People with only a matric pass have an unemployment rate of 36.5%, higher than the national average. The rate of joblessness amongst those without a matric is worse, at 40%.
The Russian war might be creating inflation, but it has also been a positive for our trade, mining, and manufacturing industries. Unfortunately, jobs in private households declined by 186 000 in the quarter. This is probably the result of emigration and middle-class families being under financial pressure.
Our economy is forecast to grow at under 2% for at least the next two years. At that rate, we can't expect to make much progress on job creation, sadly.
Bright's Banter
D.ream Group, the owner of the popular steakhouse created by Salt Bae called Nusr-Et, is in talks to sell a stake to Qatar's $450 billion wealth fund. That's Salt Bae in the picture below, showing off his trademark way of seasoning prime cuts.
The middle-eastern company is majority-owned by the Turkish billionaire Ferit Sahenk through his investment company Dogus Holdings AS. If the deal goes ahead, the 20% share will raise $300 million, valuing the whole of D.ream at a staggering $1.5 billion.
According to Bloomberg, Dogus has also been trying to raise cash and deliver on pledges it made to banks as part of a debt restructuring. In 2020, Dogus sold a 30% stake in the high-end Istanbul shopping centre to the Qataris, so they already know each other well.
The D.ream Group also has Singapore's Temasek and London-based private equity firm Metric Capital Partners on board. That's an impressive list of shareholders for an eatery chain.
Linkfest, Lap It Up
Brexit has reduced the available talent pool for UK companies, but the UK Government has a plan. A new visa has been launched for graduates from the world's top 50 universities - The High Potential Individual Visa.
Stocks in Asia are mixed this morning. Equities in Japan advanced as the Yen weakened, but a pullback in Chinese tech stocks were a drag in Hong Kong and Shanghai.
US equity futures are positive in early trade. The Rand is trading at R15.62 to the Buck.
People in the UK are gearing up for a four-day Jubilee Weekend, starting tomorrow. The rest of us will have to keep working.
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