‘The View’ will be a periodical, informing readers of the CT stance on various asset classes. There will be a major focus on macroeconomics and corresponding directional conclusion for equity indices.
Assets we intend to maintain a ‘View’ on:
- Corporate bonds
across UK, Europe, US, Japan
- Precious Metals
- FX ‘big three’ (EUR/USD, USD/JPY, GBP/USD)
We will also present the “Convexity Forward Index” for certain asset classes.
This is the result of our quantitative modelling – it tries to predict forward return (timeframe depends on which asset) in percentage points, typically around 30 days. It uses sentiment, fundamentals, seasonality and the tiniest bit of technical analysis. We will be doing a longer post on this in due course – for now see our Thesis page on how we tend to address investment processes.
For now – we’ve just entered the seasonally strongest month of the year.
Just 1 December of the last 11 on the FTSE 100 has been a down month, and the average gain is 3.24% vs 0.8% for the typical month.
Across, the pond, the seasonality is equally as compelling:
Seasonality never justifies a trade in itself, however it is worth bearing in mind.