It's in the price

  • by Graham Bond
  • 25 Apr, 2017

When we talk about the way we invest you might hear us saying we believe prices are fair; that we believe in the power of markets; or that we believe there is information in stock market prices. These are different ways of saying largely the same thing—that we believe the market does a good job of incorporating information into prices.

For example, when a company reports its quarterly results to the market, there is often a near-instantaneous change in price as the market reassesses how the new information changes the company’s future earning capability.

To understand more deeply what is going on in the stock market we can think of how another market, the market for bets on English Premier League, operated this season.

You will undoubtedly have heard that Leicester City won the league, a remarkable feat considering they were close to relegation last season and started this season with some bookmakers offering odds of 5000-1 on them becoming champions. Bookmakers considered the event as likely as finding Elvis alive, with an implied probability of 0.02% (zero). One cheeky bookmaker scrawled “pigs might fly” on an optimistic punter’s betting slip.

As the season progressed, however, bookmakers quickly revised their odds every time new price-sensitive information came to light. That new information reflected not only Leicester’s (sometimes unlikely) results but also the results of their title challengers, which of course had significant effect on Leicester’s chances. By Christmas, the odds had fallen to 10-1 and by mid-March they were 10/11 odds-on favourites.

Stock Market prices are forward-looking in the same way betting odds are an expression of the likelihood of a future event occurring. Throughout the season, bookmakers were pricing and repricing their expectation of Leicester lifting the trophy in the same way a market does when it collectively arrives at a security’s price. Company results, competitor’s results and a seemingly infinite number of other outside influences combine to set expectations of future security returns.

Our investment approach harnesses this collective knowledge and enables us to build investment portfolios that put the power of the market to work for you.

Click this link for more information on  market efficiency and stock prices

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by Graham Bond 05 Jul, 2017

Time and time again forecaster try to predict what will happen in the future to Stock Markets. In reality, nobody knows what Markets will do next.

The Wall Street Journal in the US recently published an article about the performance of Global Stocks and Shares. The article was called, “ Global Stocks Post Strongest First Half in Years, Worrying Investors .”

“The question for stocks and shares investors is whether the strong first six months of 2017 heralds a choppier second half or the start of a multiyear upswing. The data on global rallies offers a mixed record.”

In plain English, this means:

 “It’s impossible to predict whether markets will go up or down for the latter half of the year. Markets could go up or down or even trade sideways.”

The newspaper article also reported that: “Most of the major stock Market Indexes, 26 in total have risen in value so far in 2017. The last time this happened was in 2009.

by Graham Bond 29 Jun, 2017
Here's an update on Personal Finance Portal. From the 4th July our client portal will have a new look and feel about it. 
The software provider we work in conjuction with have revised the format to make it easier to use for our financial planning clients.

The Personal Finance Portal is a quick and secure way to obtain up to date valuations on your pensions and investments. It also offers you a way to communicate safely with us as the service is encrypted. The same cannot be said about email, which is not secure. 

The aim is to make the navigation easier to use and to provide more information to you on your finances. 

The video below shows some of the improvements that will be made. We hope you find it useful and informative. 

To access our portal please click this link

If you would like to find out more about the Personal Finance Portal please feel free to contact  us on 01454 321511. Consilium Asset Management offer Independent Financial Advice to private and business owners in the Bristol area. 
by Graham Bond 21 Jun, 2017

Over the month weeks and months, we are looking to improve the personal finance portal (PFP) for our clients. The first stage is to introduce a live chat, audio and video service whilst clients are logged into PFP. This is the first level of improvements we will be making over the coming months. The live chat service is safe and secure.

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