I recently made the case to add to commodities. The logic was that the Chinese recovery would be strong while the dollar was weakening. Having sold commodity stocks last year after a fabulous run, they had fallen enough, and it was an opportunity to buy.
The Chinese recovery is not all it seems. The property sector is under pressure once again, and debt defaults are rising. As I said in my last note, the dollar has started to rally, and this is putting commodity prices under pressure. The situation has changed.
Having given markets the benefit of the doubt since October, and having enjoyed a rally, I believe we should be reducing risk once again. This is very tedious, I know. But preserving capital is the priority. This is a first step. If commodities keep weakening, I shall keep selling. As always, more next week.
Reduce WisdomTree Commodities ETF (AGCP) from 5.8% to 3% of Soda
Sell iShares Silver ETF (SSLN)
You may wish to sell PHSP instead, as the fee is slightly higher, but it has significant capital gains.
The Multi-Asset Investor is issued by ByteTree Asset Management Ltd, an appointed representative of Strata Global which is authorised and regulated by the Financial Conduct Authority. ByteTree Asset Management is a wholly owned subsidiary of CryptoComposite Ltd.
General - Your capital is at risk when you invest, never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. Bid/offer spreads, commissions, fees and other charges can reduce returns from investments. There is no guarantee dividends will be paid. Overseas shares - Some recommendations may be denominated in a currency other than sterling. The return from these may increase or decrease as a result of currency fluctuations. Any dividends will be taxed at source in the country of issue.
Funds - Fund performance relies on the performance of the underlying investments, and there is counterparty default risk which could result in a loss not represented by the underlying investment. Exchange Traded Funds (ETFs) with derivative exposure (leveraged or inverted ETFs) are highly speculative and are not suitable for risk-averse investors.
Bonds - Investing in bonds carries interest rate risk. A bondholder has committed to receiving a fixed rate of return for a fixed period. If the market interest rate rises from the date of the bond's purchase, the bond's price will fall. There is also the risk that the bond issuer could default on their obligations to pay interest as scheduled, or to repay capital at the maturity of the bond.
Taxation - Profits from investments, and any profits from converting cryptocurrency back into fiat currency is subject to capital gains tax. Tax treatment depends on individual circumstances and may be subject to change.
Investment Director: Charlie Morris. Editors or contributors may have an interest in recommendations. Information and opinions expressed do not necessarily reflect the views of other editors/contributors of CryptoComposite Ltd. ByteTree Asset Management (FRN 933150) is an Appointed Representative of Strata Global Ltd (FRN 563834), which is regulated by the Financial Conduct Authority. https://register.fca.org.uk/
© 2023 Crypto Composite Ltd