Glass half full

The news overnight was good, with jobless claims slightly down, relative to the prior week, and GDP growing at a QoQ annualised rate of 1.1%, suggesting a slowdown without a collapse.

Amazon also posted decent numbers, and the stock was up initially afterhours by +11% (it wound up giving all that back when it mentioned the slowdown in AWS).

Net sales growth was double digit, and, headcount down (which the market likes, with tech having come bloated in the boom years).

NDQ (Nasdaq) was up strongly accordingly, it is slightly hard not to get the feeling it might unwind all of that by the weekend.

More broadly, however, as much as I might want to go “all in” on Value, given the Value factor spread, days like today (NDQ + tech strength) make me glad we still have some Growth-style exposure on in the multi-asset funds (targeted through active managers, like T.Rowe and FT).

Once again (and I’m afraid this framing will be with us until something breaks, either to the good, or the bad, but either way, some definitive move) the path to goldilocks seems intact, and hence our positioning doesn’t change.

That’s the glass half full.

Against that, the surge in bankruptcies is worth keeping in focus.

That’s the glass half empty.

We think slightly prioritising the half empty, with capital preservation in mind, is the right approach. We sit mildly-moderately defensive, with regard to our SAA weights.

There’s more than enough risk on, in the portfolio, to grow nicely, and achieve the SAA objectives (CPI + X).

Probably not enough to beat the benchmark, if goldilocks is achieved.

I think that’s okay. The price we pay for “insurance” here is not large, particularly when cash pays so handsomely.

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