In this legendary Stockhead series, investment manager James Whelan from VFS Group offers his insights on the key investment themes and trends in domestic and global markets. From macro musings to the metaverse and everything in between, Whelan offers his distilled thoughts on the hot topic of the day, week, month or year, from the point of view of a damn fine professional money manager.

Good afternoon,

As always here’s a check on the VIX, and whilst not a hard and fast entry/exit rule, it’s going to give us a good idea of when to be fearful and when to be greedy.

Nothing new. We’re still in a stasis mode of anguish and panic.

Remember we stay overweight cash at least until volatility gets higher.

Courtesy Interactive Brokers

What this has done so far is keep us largely out of a market that seems happy to be disintegrating into Christmas.

Courtesy Interactive Brokers

One for the technical analysts…

I still stand by my belief that we will keep the course on the bourse in December 2023 and the US market will be around the same place it is now. However the method of travel to get there will be via a winding road.

I hosted the last episode of the BIP Show podcast on Friday and managed to jag some of the smartest minds in Aussie finance. Have a listen below and tell me I’m wrong on that because a senior economist at one bank, head of Fixed Income and FX Strategy at another and two very savvy investors in different asset classes is about as good as I can do.

They each give their outlook for the year ahead domestically and internationally so give it a listen and if you can find the time maybe rate and review it as well.

Bonds, government bonds

Moving on to outlooks for the year ahead and the recent BofA Fund Manager Survey shows us that government bonds are expected to be the best performing asset of 2023. Investors are also overweight bonds for the first time since ’09.

Source: BofA Global Fund Manager survey

That’s great for our 60/40 and my strategy for the year ahead however, as Jim Bianco of Bianco Research said this morning, maybe being on the side that were underweight during the best bond rally in 5000 years and wrong isn’t ideal.

Let’s just put that on the backburner for now. “Sounds like a 2023 problem” as they say.

Poll-axed

So, I’ll leave it there with no new additions or subtractions aside from waiting on the trigger to pull on what could be a very springy stock rebound in Tesla.

Let’s face it, Elon is a lunatic, but he had a well-made buffer of people at Tesla who were employed to muffle his loose nonsense before it reached people who did real work.

He doesn’t have that at Twitter. So we’re seeing the results in real time and it’s ugly.

The second he steps down as Twitter CEO, I’m happy to entertain the impossible thought and be long Tesla.

Stay frosty, enjoy the week ahead and have a safe and wonderful Christmas. You’ve earned it.

I’ll still be available over the break at most times.

All the best,

James

PS: I’m hosting a seminar on all things 2023 in February next year. It’s all online and free to join. You can register here.

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.