Global Opportunities Beyond the Radar

The Next Market Boom: Why Now Could Be Critical


As January 2020 came to an end, we were travelling back from Japan via Singapore’s Changi Airport.

That was when I first noticed many people wearing masks. There was news of a strange new coronavirus emanating from China. People were on edge.

By mid-March, Western markets, where we invest, had fallen by up to 35%.

Running global portfolios, this was a frightening time. A million-dollar portfolio, for example, was down as much as $300,000.


Are we facing a longer bear market or the twinkle of the bull? Source: Real Leaders


I’d been through the GFC. Brexit.

Markets had eventually roared back. And startlingly fast when they did so.

But would this time be different?

What scared me most as an investor was the lockdowns. How could any business function when it was locked down? Prevented from operating?

Strong value did emerge. Under the circumstances. And I bought property-based stocks at a bargain. With the defensive view, that even if businesses were burnt-off by lockdowns, the underlying land could still be worth something.

What I didn’t envisage was the extent governments (and central banks) would step in. With ultra-low interest rates. And direct helicopter payments to businesses and their staff.

Again, the market came back. By April 2022, that million-dollar portfolio was now worth $2 million. Thanks to investing through the Covid storm.

Yet it could have been worth a lot more had we been braver. Perhaps $2.5 million or even $3 million. Had we really pursued the value that was evident.

Of course, this takes courage. Bronze balls.



Today’s opportunity?


From the second quarter of this year, a fearful hangover has gripped the Covid recovery.

Central banks overshot. Governments overspent. (Magnified in small economies like this one).

The story for much of Q2 and Q3 has been red-hot inflation. And rising interest rates to try and snuff it out.

Markets, especially at the more speculative end, have fallen.

There’s now more value on the table than there’s been in a long while.

But are we at or near the bottom? Or is there more pain to come?

Nobody has a crystal ball.

One thing that sticks in my mind is a piece of advice I received long ago. ‘Watch the bond investors. They know better than most.’

Well, the US bond market is already starting to price peak inflation. The 10-year Treasury bond yield has now reduced from 3.50% to 2.93% over the last two weeks.

What does this suggest?

Bond investors think there might be lower yields in the not-too-distant future. So are buying now. This buying is outweighing the selling.

If the majority of bond investors are right — as they sometimes are — peak inflation is not too far away. Then interest-rate pressure will come off. And, conceivably, equities could rally.

If this theory is correct, the next 2 to 6 months could be crucial.

Crucial time to buy quality companies on stock markets at reasonable prices.

Vistafolio Managed Accounts is our wholesale solution that enables this.

When oversold bear markets give way to bull markets, the rally can be rapid.

Will this time be any different?



Simon Angelo

Editor, Wealth Morning

This article is general in nature and should not be construed as any financial or investment advice. To obtain guidance for your specific situation, please seek independent financial advice. Vistafolio investment services are available to Eligible Investors and Wholesale Investors (not to Retail Investors) as defined in the Financial Markets Conduct Act (2013).

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