Insider Talk: Top Wealth Managers Discuss – To Be Bullish Or Bearish For 2016?

Investing

Insider Talk: Top Wealth Managers Discuss – To Be Bullish Or Bearish For 2016?

For this month's Insider Talk, we asked a few of the industry's top wealth managers here in Singapore to give us their views for the year 2016 and how they would approach it, given recent crude oil prices decline and scrutiny on China's economic prospects.

Published on 21 January 2016

The year 2016 is now fully underway. And in just the last few short weeks we have seen more than 10 straight days of decline across global indices, China has come under major scrutiny in terms of its economic ferocity (or lack thereof), and crude oil prices are at record lows. However, is it really as bleak as the markets and news pundits would indicate?

So for this month’s Insider Talk, we asked a few of the industry’s top wealth managers here in Singapore to give us their views for the year and how they would approach it.

Are you bullish or bearish on 2016? If you had to make a bet, where would you put your money in 2016 and why?

Steve Knabl, Chief Operating Officer & Managing Partner,
Swiss-Asia Advisory View

2016 – Bearish and volatile with some pockets of opportunities.

Old norms and industries are being challenged by disrupters. New technology is questioning current consumption patterns and business models. It will likely be a traders market with short-term opportunistic bets and not all boats are going to rise with the tide.

In equities, we prefer to be stock pickers, staying with global market leaders of the new sunrise industries and incumbent cash rich companies who could potentially buy into these new technology to stay relevant. FX and commodity will likely continue to be volatile as China rebalances itself. Bearish on Euro, Australian dollar. Credit, remain picky as defaults continue to rise and cheap credit has distorted understanding of risk.

Urs Brutsch, Managing Partner & Founder,
Head of Private Bank

Turning to 2016, we believe economic traction will hold better than in 2015 and we could start to see a bottoming of oil prices and Emerging Markets stocks. But the better economic prospects also will translate to a more frantic Fed in the second half of the year. Stocks should outperform bonds but again both will end the year with low single-digit returns. US dollar will remain underpinned by rising US rates but gains will be limited.

Rebecca F Regan, Senior Vice President,
AAM Advisory

I am cautiously bullish for 2016. The equity market falls we saw in mid-2015 have presented some interesting investment opportunities for the coming year. I  think that whilst global growth in 2016 with be sluggish, much negativity is already reflected in equity prices.

I see opportunities for recycling profits from US markets into overseas security markets which offer much better value.   Whilst some parts of the US equity market look expensive Europe and Japan offer cheaper equities and an improving macro background.  Those looking for more dynamic opportunities may look at Asian markets which are less reliant on US denominated external funding and are less reliant on commodity exports.

Robert White, Partner,
St James’ Place Wealth Management

The outlook for 2016 depends on the pace of the ‘normalisation’ of interest rates. Equities will take two or three small rate rises in their stride but if growth or inflation are stronger than expected, which leads to more aggressive tightening, then all bets are off and we potentially venture into the unknown.

Brian Gillies, AVP and Senior Wealth Manager,
Globaleye International Wealth Solutions

“Be greedy when others are fearful” – Warren Buffet

2016 should be volatile but positive. In 2015 U.S. markets fell 1%. Since 1975, following a low single digit gain or loss, the following year was positive 87% of the time. In September the sentiment index hit its lowest reading since 2007. It has only been that low five times in 40 years. Every other time, the market was at least 40% higher two years later. Markets crash following euphoric periods, (1978, 2000, 2007), not when markets are worried, as now.

Mind your stop losses but be ready to be bullish!

Andrew Tjia, Head of Private Bank,
VP Bank (Singapore) Ltd.

Whilst many commentators focus on the short term fluctuations of the markets, which look particularly uncertain in 2016, my investment ethos remains the same as always this year:  Help clients to maximise yield regardless of market conditions and but always control their risk appetite since preservation of their investments for the long term is KEY. I suggest that high risk investments are better for clients to make in their respective business with which they are familiar and successful, rather than unknown more speculative positions.

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