Jyske’s portfolio shifts for non US investors is:
Equities: Under weight (changed from neutral)
Traditional Bonds: Over weight (changed from neutral)
High yield bonds: Double under weight (unchanged)
Cash: Double over weight (unchanged)
Jyske Global Asset Management has three portfolio breakdowns for US investors:
Low Risk:
Asset type Recommendation Tactical weight
Fixed Income Underweight 70.80
Equities Underweight 9.06
Alternatives Neutral 0.00
Cash Overweight 20.14
100.00
Medium Risk:
Asset type Recommendation Tactical weight
Fixed Income Underweight 49.82
Equities Underweight 32.58
Alternatives Neutral 0.00
Cash Overweight 17.60
100.00
High Risk:
Asset type Recommendation Tactical weight
Fixed Income Underweight 26.18
Equities Underweight 53.99
Alternatives Neutral 0.00
Cash Overweight 19.83
100.00
The bank expects continued slowing in the global economy. In the 4th quarter of 2008 economic growth slowed in at a fast pace in a short time.
Strong inflation in 2008, a major drop in industrial production and banking crash has caused global industrial confidence to slide. This has clobbered economic growth in the last quarter of 2008.
Therefore, Jyske believes a turn in the economy will be delayed until at least
the third quarter of 2009 and that even this may not happen.
There is a chance that recovery will not begin until 2010. For the first one months of 2009 they expect negative growth in industrialized countries as well as a
considerable weakening in emerging market growth making this recession the worst in recent times.
This has caused much lowered interest rates and increased government spending… already around 2% of global Gross Domestic Product.
The bank is uncertain what effect the government interventions will have nor what impact lower energy and food prices will have along with tighter credit.
The bank is prepared for two scenarios. The first scenario being that falling oil and food prices along with government spending and low interest will get economies moving again albeit slowly by the end of 2009.
The second scenario has greater risk and depends on how long and deep the financial crisis extends and how much credit is tightened.
The financial sector has suffered great loss worldwide and the banking system may not be able to survive on its own. Some nationalization may be required.
More losses will be on the way as the recession continues. This will force banks to tightened credit and widen the interest margin they charge .
The amount of credit tightening will determine how much negative spiral the economy suffers, but Jyske sees a fairly high probability that the recession in the industrialised countries and the slowdown in economic growth in the
emerging-markets countries could continue into 2010.
This thinking supports my comments of yesterday to do nothing right now. Take events as they come.
Earlier I was anxious to take advantage of the great values that had developed. Now I believe there is plenty of time for value investors to pick and choose.
US investors can get more information from Thomas Fisher at fischer@jgam.com
Non US investors can get more information from Rene Mathys at mathys@jbpb.dk
Until next message good global investing.
Gary
Join us in Cotacachi and on Ecuador Coast in March.
Merri, our webmaster and I have created a new course on how to build a web business with a webmaster. Here is a special offer on this new course.
You can enroll in this special course for $299. However if you sign up for our three courses in March 2009, I will send it to you free. You save $299.
March 8-9 Imbabura Real Estate Tour
March 10-15 Ecuador Import Export Expedition
March 16-19 Ecuador Coastal Real Estate Tour
Bob Shane will be at our March courses and will be available to provide health balancing.
Get our web based course FREE if you join us in Ecuador this March.
Attend any two Ecuador courses or tours in a calendar month…$949 for one. $1,349 for two
Attend any three Ecuador courses or tours in a calendar month…$1,199 for one. $1,799 for two
Future 2009 courses
May 29-31 JGAM Global Asset Strategy Seminar
June 12-14 Shamanic Mingo Tour
June 16-17 Imbabura Real Estate Tour
June 18-21 Ecuador Coastal Real Estate Tour
July 3-6 Ecuador Import Export Expedition
July 8-9 Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour
July 24-26 IBEZ North Carolina
Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour
Oct. 9-11 IBEZ North Carolina
Oct. 21-24 Ecuador Import Export Expedition
Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour
