Expect sideways market as bull run comes to an end

equities/US/

27 November 2020
| By Laura Dew |
image
image
expand image

While markets are currently bullish thanks to several successful COVID-19 vaccine trials, it is likely to move sideways in the next few years and end a decade-long bull run.

Markets had been on a bull run since March 2009 with the Dow Jones reaching a record high of 30,000 points last week. This was particularly driven by market leaders such as the FAANG stocks, Tesla and Berkshire Hathaway which were all among the 10 largest US companies.

In a webcast, Avenir chief investment officer, Adrian Warner, said: “We are seeing a robust, resilient market over the next six to 12 months but we are getting to the level of concentration that we could see markets go sideways.

“We haven’t seen that in 10 years as we have had a long bull run but it normally happens in market environments like now where the few firms driving markets reach their limits of what they can do and start to struggle.

“It is important to think of the opportunities outside of the major stocks, there are great opportunities outside of the index majors. We are bullish in the near term but in the next three to five years, the market may struggle and move sideways as market leadership shifts.”

He said the Avenir Global fund was running a barbell strategy within the portfolio, which favoured growth and recovery plays as well as a small amount of special situations.

According to FE Analytics, within the Australian Core Strategies universe, the Avenir Global fund had lost 5.2% over one year to 30 October, 2020, versus returns by the global equity sector of 2.2%.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 6 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 5 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 4 days ago

TOP PERFORMING FUNDS