Key takeaways from the week

  • Stocks were lower for the second week in a row as renewed concerns regarding global growth prospects have put pressure on investor sentiment;
  • Recent U.S. employment data was not as robust as many had expected. The unemployment rate stayed stubbornly at 5% whereas market consensus had expected it to drop to 4.9%;
  • Outside of U.S. economic data the markets were also disappointed by poor Chinese data worrying investors about the second largest economy in the world; and
  • While month to month economic readings can be choppy, we think the broader trend remains consistent with a modest pace of growth, and we expect equities to grind higher from here with some bumps along the way.

History doesn't always repeat itself

Picking yesterday's winners is one of the biggest causes of self-investing mistakes. Andrew Hallam highlights the problems associated with it beautifully here.

For most investors trying to do it alone, it's very difficult to overcome the behavioural biases which lead to poor decision-making. The industry doesn't help with the literature it produces, you'll very rarely see negative performance being highlighted. The majority of people are visual learners, as they say, "a picture speaks a thousand words".

Which of the below graphs do you think most people find persuasive?

Market commentary

How to get around this? DON'T INVEST BASED ON A GRAPH!! If you can't avoid graphs then speak to a professional who can keep you on the right track - having someone to stop you making simple mistakes is invaluable.

 

Market data

Equity Indices Value Weekly Change
FTSE 100 6125.7 -1.86%
S&P 500 2057.14 -0.40%
Hang Seng 20109.87 -4.54%
Shanghai Composite Index  2913.24 -0.85%
Nikkei 225 16106.72 -0.25%
Dax 30  9869.95 -1.68%
Bonds  Value Weekly Change
US 10 yr 1.78% -2.25%
UK 10 yr 1.43% -11.19%
Commodities / Energy Price Weekly Change
Gold $1,280.25 -1.50%
Brent Crude Oil $45.92 -1.92%
Currencies Majors Value Weekly Change 
EUR-USD 1.1419 -0.61%
USD-JPY 107.58 1.10%
GBP-USD 1.4423 -1.33%
Central Bank  Rate
Fed Reserve 0.50%
ECB 0.00%
Bank of England 0.50%
Bank of Japan -0.10%
Prices as at Friday 06 May 2016

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