Quick Links
Our Website












Markets in August were generally weaker, except for gold and commodities: 
 Year-to-date, only developed market equities show positive returns, continuing a strong run over the last three years:
The big story this month was the rout in emerging market currencies. The Indian Rupee plunged to record lows versus the US Dollar, and has lost 20% this year, marking the steepest decline in over two decades. In short, India is in full panic mode. 


Asian equity markets also got the jitters, as various Fed luminaries gathered at their annual Jackson Hole confab said that they were on their own to work out their situations if the "loose juice" of Fed bond buying was curtailed ("tapered").

The link below is to a most excellent analysis of the current crisis in emerging markets by Ambrose Evans-Pritchard, perhaps the most astute observer of the global economy. In a nutshell, he feels it is a critical time to work with, not against, emerging markets partners:



While the US government bond sell-off in June was the first "knee jerk" reaction to the Fed's tapering, what we are seeing in emerging markets now is perhaps the more consequential effect of the Fed's contemplated withdrawal of global monetary support. Momentum clearly deteriorated for emerging markets equities in early July, foreshadowing current weakness:  
However, emerging market equities have the most robust  Seven Year "real return" (after inflation) profile of any major asset class according to GMO, one of the world's leading authorities on asset allocation:
One of the great paradoxes of investing is summed up by the current state of emerging markets: a potentially superior long term holding, but tarnished by recent and significant underperformance, thus bringing out sellers. (Many investors can't hold through temporary declines that inevitably accompany "investing for the long term".) Buying it right will be very rewarding, though, and therein lies the rub (and why we can look to price trends to increase the odds of success).


In other front page news, the situation in Syria is poised on a razor thin precipice. Oil prices have risen as fears of a supply shortage predominate:


Most analysts see a sharp spike in prices to the $125 to $150 a barrel range (Brent crude) should a US assault commence. In the event of conflict, oil prices are likely to stay "higher for longer". More pain at the pump seems likely. (Much has been written about the oil glut in the US resulting from new supply delivered through "fracking", which has kept the price of West Texas Intermediate - WTI - crude down. For once the US may benefit from the next "oil crisis"!) 


While it is clear that the oil market is front and center for now, let's not forget how "risk off" trades can come back into vogue during "war markets". Gold, the US Dollar, and high quality US bonds would be likely to gain favor.   
U.S. equities are entering a seasonally volatile period, with August showing downside pressure. Declines ranged from 2 to 4%.    
In general, US stocks remain in a leadership position, though, and are the destination of choice for global investors. While recent weakness in the S&P 500 and other major US indices may continue for a while, the price action does not appear to signal any meaningful declines on the horizon.   
September promises to be an eventful month, with the all-important German federal election leading the pack. The US debt ceiling limit will be breached soon, and is also likely to produce spirited debate.
In closing, we hope that cooler heads prevail and the Syrian situation does not escalate, but it looks like war headlines are also set to be part of the mix. As many of our readers know, we have great respect and admiration for the men and women of our Armed Forces, and we hope you join with us in wishing them safe passage and a speedy return wherever they serve us. 



2013 Stratford Advisors, Inc. All Rights Reserved.

This publication is intended solely for information purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or sell or trade in any securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. In no event should the content of this market letter be construed as an express or implied promise, guarantee or implication by or from Stratford Advisors, Inc., or any of its officers, directors, employees, affiliates or other agents that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. All investments are subject to risk which should be considered prior to making any investment decisions. The firm may hold for its clients, Principals or employees, positions in any securities mentioned herein, and may buy or sell such securities at any time without prior notice. 

© 2019 • Stratford Advisors • Investment & Invested in your Future