Many investors find themselves in a market environment that is none like anything they have seen before. From decades-high inflation, food and energy shortages, and an ongoing war; there is so much going on. We would like to touch on some of the predominant themes that have taken shape in the investment space over the last couple of months.It is fitting to start with inflation, considering it is currently influencing everyone on the globe.
Many believe that the root cause was the war in Ukraine and subsequent sanctions on Russia. Whilst, this may have exacerbated the problem, the root cause has stemmed from years of investment decisions. Due to the global focus on ESG, institutional investors have not been investing much in the energy sector – oil and gas in particular – for years.
The squeeze in the fertiliser market started when China, which represents about 30% of world fertiliser production and 15% of exports, halted phosphate exports in September 2021 in an effort to ensure adequate domestic supply. Then came the Russian invasion of Ukraine which has only exacerbated the problem due to the world’s reliance on Russia for fertiliser. Russia produces 9% of global nitrogen fertiliser, 10% of global phosphate fertiliser, and 20% of global potash fertiliser.
New Age Alpha is a global leader in building actuarial-based asset management solutions that aim to protect investor portfolios against this idiosyncratic risk caused by human behaviour. Investors are unaware of this risk that leads to loss, cannot be diversified away, and don’t get rewarded for taking it. Unlike firm-specific risk, which can often be diversified away, this risk affects stock prices specifically and we believe is caused by human behaviour.
Investment advice can be provided by Global & local Investment Advisors Ltd but only after an analysis has been conducted of the investor’s current financial circumstances and investment portfolio, only then will a recommendation be provided based on that investor’s own circumstances by Global & Local Investment Advisors Ltd.
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