Worldwide Financial Planning

Minutes from the ECB's January monetary policy meeting have confirmed that fears of Trumpian dollar manipulation and currency wars keep Mario Draghi awake at night.

Meanwhile, Fed officials are more concerned than investors had thought about the pace of the country's growth.

In one week, leading newspapers commented ‘inflation has peaked’ (therefore rates don’t have to rise) followed a week later by ‘interest rates have to rise to protect against rising inflation’.

This week saw a small but significant rise in bond yields, continuing a trend which started in January and which is most likely due to increasing inflationary pressures and expectations of rates rising faster than previously thought.

Some large papers blasted about risk parity funds driving the market. In simplistic terms, risk parity funds might balance out risk by having 60/40, 70/30 in equities and bonds (for example, to balance out risk).

Wow. That escalated quickly.

This week a major bout of volatility rocked markets with a worldwide sell-off prompting fears that the long bull run since the financial crisis might finally be over.

Investors are then lured with higher dividend headlines to make the best returns, but sometimes without realising the risks involved.