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Market Comment - September '20

September 2020

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.

Since May, the UK stock market indices have drifted sideways, and since the peak in May 2018, the FTSE-Small Cap ex-IT index is down just over 25%. UK smaller companies are cheap. This valuation attraction stretches to cyclicals generally, which is why the Value style of investing (dominated by cyclicals) has performed very poorly versus the Growth.The difference between the two is now so stretched that, statistically, it should only occur once in every 6,849 years (a 6 sigma event in the parlance).The smell of opportunity is in the air when such extremes prevail. But when? We have no more idea on timing the change in sentiment than anyone else, but we are monitoring a range of indicators to catch this change in leadership as ...

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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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