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Quotidian Investments Monthly Commentary – June 2021

July 2, 2021

Quotidian’s last two monthly reports have both been rather extensive simply because there have been a wide-ranging number of worthwhile , market moving topics to bring to your attention. June, however, has been less newsworthy but more performance driven and I see no virtue in highlighting or repeating many of the factors that you are already aware of. You’ll no doubt be relieved to hear that this month’s report will therefore be far more concise.

It may also please you to see that there has been a respite from the period of subdued valuations that has dogged equity markets for much of this year. Hopefully, common-sense has made a long-awaited and welcome return to the process of pricing shares; long may that persist.

On 30th June 2021 the FTSE100 index closed the month at 7037.47 (a rise of +0.21 in the month of June itself) and it now stands at up +8.93% for the 2021 calendar year to date. By comparison the Quotidian Fund’s valuation at the 30th June shows a rise of +4.73% for the month and so the Fund is now up +10.33% to the halfway point of 2021.

For the time being it appears that the optimism we’ve expressed over the past three months (despite the pessimistic, disconsolate and unnecessarily miserable equity market pricing) was well placed. We also continue to believe that the second half of 2021 will continue to be much more positive.

In particular, and to support that view, please indulge me whilst I briefly re-emphasize two salient economic facts that I first mentioned in last month’s report. On 25th May we learned via forecasts from the National Association for Business Economics (NABE) that the US economy is expected to rise by 6.70% this year and that inflation in that country is expected to remain at 2.80% for 2021 and then fall to 2.30% next year.

Isn’t it bizarre that during May many of the usual gloomy market-making suspects were promoting scare stories and issuing intensely negative briefings based upon confected ‘concerns’ about rising inflation leading to precipitous falls in equity markets. This was the general narrative just before those very markets began, throughout June, their steepest rise of the 2021 year thus far. Surely the gangsters who control the stock-markets wouldn’t have been trying to dislodge unwary or easily alarmed investors (and thereby simultaneously taking deliberately undervalued shares back onto their own books) just before marking those previously suppressed prices upwards again to more economically realistic levels (and selling them back again at higher prices to another raft of gullible investors). Perish that unworthy thought.

We also draw a degree of comfort from a piece of research issued by Goldman Sachs on 21st June wherein they anticipate that $500 billion will be invested into the US stock-markets in the foreseeable future. In fairness, we would normally treat that sort of hubristic statement (and especially from that source) with a high degree of scepticism.

However, on this occasion, what gives it some credibility are the encouraging forecasts mentioned above from the National Association for Business Economics together with consistently positive messages from the Federal Reserve in relation to their attitude to and intended methods of controlling future US inflation.

Let me leave you on that high note for this month and, for the time being, we remain on course for a more upbeat and confident (and less volatile) second half of 2021. Steady as she goes.

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