Review of 2009 and 2010 strategy.

This time last year, I wrote that the New Year tradition of making forecasts for the year to come was an even more perilous exercise than usual. My reasons at the time were linked to the lack of visibility on the economic situation and the uncertainty on the banking landscape.

The inconsistencies that were predicted by many economists when the euro was introduced, but were masked by the favourable economic situation between 2000 and 2008, have now come to light with the problems in Greece.

As at beginning of November, the fund's net equity weighting is 28% (51 minus 23% hedged through the sale of futures). 

In the following, I try to answer some of the main questions people have posted on the blog in the past few months.

As at beginning of October, the fund's net equity weighting is 27% (46% minus 19% hedged through the sale of futures). The equity allocation has slightly increased compared to early September when it stood at 22%.

Below, I offer some answers to five questions that have been frequently put to me.

You might be surprised at my reticence to believe in a sustainable improvement in the economic situation when every day the media seem to be presenting us with encouraging economic statistics. So here is a brief summary of my reasons.

We have taken advantage of the rise in stock markets over the last 2 months to reduce the equity allocation in the BL-Global Flexible fund even further.

There is no doubt that the recovery on the equity markets since March has been impressive. Since their lows of 9 March, the European and US markets have bounced back by around 45 %, while for some of the emerging markets, the figure was closer to 100 %.  And although the sharp recovery that started in March seemed to be gradually losing steam by May, the markets began soaring again in mid-July.