Although our crystal ball is no more polished than anyone else’s, our fundamental views are clear. Bonds are already grotesquely expensive, yet may get more so (we’re not investing in “the usual suspects” so we don’t much care). Most stock markets are pricey – but in a world beset by QE (and prospects for more, in Europe and Asia) which prices can we really trust ? By a process of logic, elimination and deduction, out of the major asset classes, only quality listed businesses trading at or ideally well below a fair assessment of their intrinsic worth offer any semblance of value or attractiveness. Pretty much everything else amounts to nothing more than paper, prone to arbitrary gusts from some very powerful, and very windy, bureaucrats. We note also that former Fed chairman Alan Greenspan, no doubt looking to polish his legacy, managed to front-run the Fed’s QE announcement by pointing to the merits of gold within a government-controlled, fiat currency system. Strange days indeed.

David Fuller's view

Here is Tim Price's Letter.

A credit crisis followed by quantitative easing (QE) has created more uncertainty than many investors have previously experienced or witnessed.  It has also created diverse market performances among global stock markets, reflected by widely different valuations.  This is unusual five and a half years into a bull market cycle. 

Long-term forecasts at this time, I suggest, are probably even less valuable than usual.  Moreover, they appear to be heavily influenced by the prognosticator’s own positions.  Those of us who remain fully invested, whether due to common sense or naïveté, tend to be focussed on market trends and valuations, while imagining that a secular bull market lies ahead.  In contrast, those who feel that QE is a reckless gamble, tend to be underinvested.   

Meanwhile, mostly accommodative monetary policies remain a global tailwind for stock markets.  Seasonally, the next few months are more bullish than bearish.