“Three perspectives – One strategy”

How I combine three different time perspectives into a consistent investment strategy

As an investor, I combine three different time perspectives into a single investment thesis or strategy

Long-term (LT) investment perspective

My LT investment perspective focuses on analysing key structural drivers that extend across multiple business cycles.

As a macro and monetary economist, I start by analysing the level, growth, affordability and structure of debt. In my experience, this is the most important feature of LT secular cycles with direct implications for: economic growth; the supply and demand for credit; money, credit and business cycles; policy options; investment risks and asset allocation.

My LT investment perspective reflects my early career in Asia and my experience of Japan’s balance sheet recession.

Medium-term (MT) investment perspective

My MT investment perspective centres on: analysing money, credit and business cycles; the impact of bank behaviour on the wider economy; and the impact of macro and monetary dynamics on bank sector profitability.

Growth rates in narrow money (M1) and private sector credit demonstrate robust relationships with the business cycle through time. My interest is in how these relationships can assist investment timing and asset allocation.

My investment experience in Europe shapes my MT investment perspective, supported by detailed analysis provided by the European Central Bank (ECB).

Short-term (ST) investment perspective

Finally, my ST investment perspective focuses on trends in the key macro building blocks that affect industry value drivers, company earnings and profitability at different stages within specific cycles.

My ST investment perspective is influenced by my experience of running proprietary equity investments within a fixed-income environment at JP Morgan. This led me to reappraise the impact of different drivers of equity market returns.

One strategy

My investment outlook at any point in time reflects the dynamic between these three different time perspectives.

My conviction reflects the extent to which they are aligned.