Hello and welcome to our Olympic Wealth Fund newsletter!
With the aid of our expanded marketing department, we are now committed to publishing a quarterly newsletter. We will aim to give our valued investors a view of the world from an investing perspective, what has happened in that world that may affect our Fund growth, and what we as a company, are going to do about it.
Our Javelin fund is up 20% this past quarter!
I know it’s been a while since we’ve been in touch but as you can see we’ve been busy growing our Funds with the primary focus to increase your wealth.
Our Javelin Global Fund has grown by over +20% this past quarter as it benefited from some consolidation in the businesses we own in the UK, together with increased revenues and reduced cost. We also sold all of our property holdings and gained approximately +10% from what we paid.
Our Marathon Fund has also gained. A UK company it specifically owns performed ahead of our expectations, lifting the fund’s performance as well as gains in the equity portfolio.
The outlook for our Funds in the next quarter is fair to cloudy as we expect a small sell off in the US and we have the UK general elections to take into account.
A child’s mind…
Getting your child to transcend from diapers to shorts as any parent knows, is a challenging process!
My 3 yo son happens to be partial to a cartoon called “Tayo” which is a bus and so my lovely wife recently ordered the toy bus, and then stuck it high on the toilet door with a view to teaching our son that he will only get the bus, as she slowly explained to him, once he tells us that he either wants to “poop” or “pee pees.” The idea being that he informs us before any accident occurs.
So, having given him the instruction, we proudly sat around waiting…
No less than five minutes later Kellan ran off, sat down on the toilet, and shouted that he wanted to “pee pee and poop poops” and then promptly came running, demanding the toy bus!
The moral of the story? Like investing: be crystal clear with your plan and know what your goals are!
A Global Perspective – Our Funds
In the US the Dow Jones industrial average (DJI) has risen this year by just over 1% in three months. I don’t think the gain in the index year on year (nearly +9%) fully reflects the lumpy economic recovery.
There appears to be a growing divergence between the market recovery and the economic one that the public feels in their back pockets. Wage growth is sluggish and is below the Federal Reserves expectations.
March wage growth was +2.1%, with the Fed having +3.5% as their target. The reality, therefore, is that while employment figures dipped in March, the public just isn’t feeling confident to spend as they should in a recovery. Sooner or later there will be a market correction, probably when the Fed raises interest rates…
This is singularly the USA’s biggest challenge in the short term: yes gas prices are lower (and therefore the public has more disposable income) but any rise in interest rates might squeeze an already anemic public into closing their wallets and purses inadvertently stalling the economy.
As Janet Yellen the Fed Chairman herself said: “this is not a normal recovery.”
In the UK similar issues prevail, but job growth has risen to all all time high with some 30M people now in work.
The short term outlook we feel for the UK, is largely driven by what happens in the May election.
In India, an economy we follow closely, estimated GDP growth (the monetary value of goods and services produced) is expected to grow to 7.4% making it the fastest growing large economy in the world. Indeed, we noted that in his Union budget for 201-2016 Finance minister Arun Jaitley said that “aiming for a double-digit growth seems feasible very soon!”
Clearly the slew of new reforms that Prime Minister Modi has introduced since taking control, have transformed the economy since May last year, with major reforms to foreign investment, foreign exchange, trade liberalization and reductions in export-import taxation to mention a few.
Over in China things are a bit worrisome. The Chinese Government has hitched its wagon to transform the economy from one being based on foreign investment to that of domestic investment.
To do this the Government had to slow down the economy over the past few years, but the rate of deceleration has gathered pace and they are now scrambling. Bank debt is extraordinarily high and the overall economy remains highly leveraged (at a debt-to-GDP ratio of +250%.) Again, here, public spending is tightening as the job market softens together with a worrying property market.
At Olympic Wealth we are focused on building our brand in the major continents and will strive to give you the best investment experience possible, helping you create wealth and provide for your future.
See you all in August!
Richard Baxter, CEO