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View the article online at http://citywire.co.uk/wealth-manager/article/a750603

Stewart Cowley: Manchester United 1 – Capitalism 0

by Stewart Cowley on May 13, 2014 at 14:10

Arguably, something of this sort is going on as we speak. There is a pronounced antipathy towards public borrowing whilst the self-inflicted wound of increasing capital needs on banks globally is reducing both the ability and propensity to lend and borrow.

Workers are increasingly aware of the need to make good the sub-inflation pay awards they have experienced since 2007 whilst there is public distaste for the notion that companies should turn a profit, especially utilities.  

But, to me, these notions, as usual, are going down a track that is 180 degrees away from where we should be going. This is the time that we should be embracing capitalism with all its faults.

Fortunately, there are signs we are gradually dragging ourselves out of the sand; low-grade credit cycles (propelled by companies investing and small institutions lending) have started in the US and UK even as Europe implodes in front of us.

But, having said that, if long-term interest rates in developed markets reached 5% in the next couple of years then bonds will be a 'buy'.

Citywire + rated Stewart Cowley runs the Citywire Selection Old Mutual Global Strategic Bond fund, which has returned 5.6% in the three years to March.

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1 comment so far. Why not have your say?

faep

May 13, 2014 at 15:40

Time to brush up on some Fritz Schumacher, perhaps?

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