Wednesday, April 11, 2018

Outlook for April 2018

Well, Q1 2018 is in the books and the markets are starting to seem pretty interesting day-by-day. The pillars of the market – the FAANG stocks (before the recent decline, the 5 stocks made ~14% of total US market) are starting to see pressure as the public has started revolting against the platforms socially. Most of all, the Facebook debacle was just a matter of when, not if, when the user’s trust would be broken and everyone woke up to realize what they were signing up to. The users have now started questioning the same for other platforms too, with an increased call to regulation – which will be interesting to see follow.
Some interesting developments over the last week in the oil market occurred, with China deciding to price and trade oil directly in CNY instead of US$. This is a massive overt move against the US hegemony, which will be extremely interesting to watch. The days of US$ as the sole world reserve currency are numbered, as China puts on the pressure with its traders to accept CNY. This is never going to be an overnight move of course, but something that will take years and decades to play out.

Outlook for April 2018

The slide of US$ is expected to continue, we can expect to see asset prices starting to inflate. Assets such as US stocks have already been inflated over the years, but there are other places where opportunities exist. The biggest opportunity lies in the commodities market (hence my oversized exposure to the Basic Materials sector). Some other areas that provide good investment opportunities include: International markets (non-US equities), non-financial assets that can benefit from sliding US$ such as REITs, pipelines (i.e., real assets/infrastructure plays) etc, and Value-focused plays (the Value-factor has underperformed compared to Momentum-factor for almost a decade now!).
I will be looking for opportunities in these areas for new funds, but for now I am not desperate to make any moves and happy to sit back and watch market volatility make a comeback.
Looking for investment ideas? Check out this Top Investment Picks for 2018, where 35+ bloggers present their top pick and a reason to invest in those securities.
What are your thoughts on the points mentioned above? Do you have any specific thoughts on the markets and looking at anything interesting? Share with a comment below.
Full Disclosure: Our full list of holdings is available here.


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