Summer rally ?
Jul 29, 2022
One of our favourite quotes from Peter Lynch is about market timing: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”. As we approach the end of July, it now looks like the rebound will make this month the strongest month for global stocks and bonds since 2020. We have made the point on different occasions that equity markets look oversold in the short run and have been ripe for a technical rebound. Without wanting to spoil the party, we however also think that challenges remain abundant as central bankers need to engineer a soft landing while fighting inflation levels unseen in a generation. The Q2 result season appears solid until now. Valuations are no longer excessive. Labour markets are strong for now. At ECP, we continue to invest for the long term in undervalued businesses with strong earning power and do not hesitate to put money to work when Mr Market is depressed like in H1 2022. This is on what we focus to try to generate returns for our clients.