No one knows anything: Trend following in a portfolio

GOLDMAN downgrades equities on inflation and rising yields, after the market has already dropped 20 per cent. Meanwhile, Morgan Stanley says Asian stocks are near bottom.

As everyone in wealth management is paid to have an opinion, investors end up bouncing from one market view to the next. At dinner events the first question I’m asked when they know my profession is: Where do you think the markets are going? This question gains even more weight in a dismal year like this one, where the traditional equity/bond portfolio is having its worst performance in the last half century.

Is the current re-test of the June lows a double bottom, or will there be a recession next year that pushes markets down a further 20 per cent? Ask 10 finance people and you will get 11 answers. The problem for investors is that all this noise confuses the investment process.