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Market Comment - August '17

August 2017

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Last month we came off the fence and said the US stock market is in a bubble. This is based not just on extreme valuation but also evidence of irrational investor behaviour in scale, in this case in the ETF market.Bubbles are dangerous and when they burst, falls of 50% should be a minimum expectation of the outcome. But this tells you nothing of when it might burst, the timing issue. The solution comes in two parts.You must acknowledge that a time will come when there will not just be middling market falls (say up to 20%) but extreme market falls (of 50% and more). Therefore you must have a clear, written, contingency plan. Your objective is to protect your capital. Make it fit your level of experience, your spread of stocks ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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