View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
May 15, 2013

Equity Markets are Riding High, So is a Fall Inevitable?

By Spear's

When markets breach all time highs, wise heads become anxious about impending falls

Stronger than expected retail sales in the US pushed the S&P 500 to 1630 on Monday. Meanwhile Japan, the punt in many private client portfolios, has witnessed a 70 per cent rise in the Nikkei since Shinzo Abe started advocating monetary easing in November.

Shinzo Abe’s ‘Abenomics’ has been boosted optimism for Japan’s economic revival

To illustrate how easy wealth mangers have found updating clients since New Year’s Day, one need only turn to Asset Risk Consultant’s Private Client Indices. Benchmarking the performance of 49 private client investment managers, these recorded gains of 10.4 per cent in the Equity Risk category in Q1 – slightly more than the entire of 2012, a good year for the markets, which saw an increase of 10.1 per cent.

Smiles will thus be appearing on the faces of many wealth managers as increased risk appetite promises a shift away from low-margin cash and fixed-income products. But before the industry starts predicting a return to the 2005-2007 heydays — when pre-tax profit margins at the private banks were 35 basis points on assets under management — a sense of perspective is needed.

When markets breach all-time highs, wise heads become anxious about impending falls. As any value investor who has read his Ben Graham would say,’There’s no margin for safety’, so I’m keeping an eye out currently for insightful research on what will trigger a correction. Steers are welcome…

Read more from Freddy Barker

Read more from Wealth Wednesday

Content from our partners
Why investors should consider investing in nature
HSBC Global Private Banking: Revisiting your wealth plan as uncertainty abounds
Proposed non-dom changes put HNW global mobility in the spotlight


Don’t miss out on the best of Spear’s articles – sign up to the Spear’s weekly newsletter


Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network