Liontrust Views Autumn 2022 - Magazine - Page 3
views
Welcome
to LIONTRUST views – Summer 2021
Welcome to the Summer edition of Liontrust Views.
Inflation matters to all of us. Most obviously, this is because
it makes the prices we pay for goods and services more
expensive. Unless our income rises at least in line with the rate
of inflation, we will become poorer in real terms.
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IS THE
INFLATION
GENIE out
of the bottle?
8
IMPROVING PROSPECTS
for Japan
Governments and central banks have historically tried to
contain and then reduce inflationary pressures by raising
interest rates. This makes debt more expensive and will impact
the performance of stock market listed companies. Usually,
growth stocks are most negatively affected as they are priced
more on the value of future earnings and these are reduced by
interest rates going up.
Our article on pages 4 and 5 examines the prospects for
higher inflation, how persistent might it be and how might
governments and central banks react. The article also discusses
why stock markets worry about inflation.
Equally, deflation can be damaging for economic growth and
stock market performance. One country that knows this better
than most is Japan and has been shunned by many investors as
a result. On pages 8 and 9, we analyse whether Japan could
be one of the winners from the global economic recovery.
We look back at the forces driving stock markets over the past
quarter and provide our latest investment views on pages 6 to 7.
One theme we have seen develop is a greater number of sharp
movements in stock markets, both up and down. These can be
painful for investors if monitored on a daily basis. But our article
on pages 10 and 11 provides analysis on the benefits of
remaining invested over the long term and navigating through
any such volatility.
10
TIME IN THE MARKET,
not timing the market
We hope you find this issue of Liontrust Views insightful and
interesting.
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