After several months of protracted and fruitless negotiations between Greece and its creditors, the Greek debt crisis seemed to be moving towards its final scenes at the end of June.
The FTSE All Share Index declined by -2.8% in September in total return terms. The CF Woodford Equity Income Fund, has thus far withstood these volatile conditions resolutely as we had hoped it would, given our cautious views and strategy.
We live in an extraordinary world, where the market eagerly anticipates the idea of negative interest rates without really thinking at all about the underlying problems that make such an extraordinary policy necessary.
With the UK stock market close to all-time highs, perhaps we shouldn’t be too surprised to have seen a slightly more risk averse attitude creeping back into markets over the last few days.
European bond and equity markets are booming. Bond yields are pricing in little or no risk in countries that can neither balance their books nor pay their way and whose living standards continue to be rented not earned. Despite rising public debts, falling consumer prices, historically high rates of unemployment, dodgy banking systems and zero bound growth rates, investors are rushing to lend at ridiculously low rates to countries that have no viable way of paying this money back.