Back
I have just written our quarterly investment review and, as ever, it gives our take on what is going in investment markets and our outlook for the rest of the year. If you want a copy and are not on our normal distribution list, then please do get in touch. Having just written a lot on economics and markets I thought I’d step back and mention here a couple of the more surprising things that have come across my desk in the last few weeks.
First, one theme for the year so far has been the resurgence of the Japanese stock market. Part of the reason is that Japan finally looks to be escaping the world of deflation and negative interest rates. I was struck in the chart below by just how much this regime had affected the average Japanese worker. Real wages are flat in Japan over the last 20 years. The UK is hardly a shining economic excess story, but even we have seen real wage growth of over 20% in this period, in line with France and better than Germany.
Also, take a look at Italy. Poland (not on the chart) shows that Europe can house some dynamic economic success stories. Polish GDP has doubled over the last 10 years. Whatever they are doing in Poland, Italy (and the UK for that matter) needs to have a look.
Perhaps the basic quality of life in Italy (food, culture, weather) is so good that Italians are OK to get off the capitalistic treadmill and enjoy their lives. This seems to me to be the opposite to what is happening elsewhere: younger people seem to work harder and be more focussed on career and materialistic success at an earlier age than I remember from my youth.
I was therefore struck by the chart below which shows how average US college students spend their days. 2.8 hours per day on education! I think even I have managed a bit better than that (probably!) but the numbers below certainly do remind me of my own time at university. For all the talk of Millennials and Generation Z, maybe we aren’t that different from our kids after all.
Chris Brown, CIO
cbrown@ipscap.com
The value of investments may fall as well as rise and you may not get back all capital invested. Past Performance is not a guide to future performance and should not be relied upon. Nothing in this market commentary should be read as or constitutes investment advice.
