246. “Everyone has a plan until they get punched in the mouth”

Mike Tyson spoke from experience when he said “everyone has a plan until they get punched in the mouth”. 2022 was a punch in the mouth to investors everywhere and resulted in emotional volatility in markets according to Steven Andrew, manager of M&G Episode Income. Steven talks us about investor optimism — and pessimism — across a range of assets, notably UK equities and emerging market bonds. We also consider how human behaviour influences pricing behaviour and market data, ultimately causing continued emotional uncertainty as we head further into 2023. What’s covered in this episode: Why investor optimism was high at the start of 2023Have investors moved to a period of complacency?Is doom and gloom a rational reaction to the UK market?Less structural appetite for UK equities on the global marketWhy Europe is currently “flavour of the month” for investorsInvestor behaviour and the banking sector — and how it compares to 15 years agoThe manager’s views on Japanese equitiesTwo reasons why the M&G Episode Income doesn’t currently hold any propertyWhy take the risk in emerging market and high yield bonds today?Being prepared to act amid volatilityWhy market — and human — shock has caused errors in market pricing dataEmotional uncertainty driving markets forwardWhy price behaviour is all about understanding the nature of the worldMore about the fund: The M&G Episode Income fund invests directly in individual stocks and bonds, while property exposure is gained by investing in property funds. The name “Episode” refers to those periods of time when investors’ emotions cause them to act irrationally. The manager uses behavioural finance to find pockets of value and invest against the herd, rather than following it.Learn more on fundcalibre.comPlease remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.Learn more on fundcalibre.comPlease remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.