OHV Asset Management

Time and again I look for it. And every time I do not find it. What is it about? I look for the word “money growth” in interviews and speeches by board members of the European Central Bank. That is strange and revealing at the same time. 

This week’s relative calm in equity and bond markets is in stark contrast with last month’s turbulence. Investors appear to have put concerns over the war in Ukraine on hold for a while. Some market experts warn however that “sentiment may be too positive”. Illiquid corporate bonds are seen as a safe haven.

The economic consequences of Russia’s invasion of Ukraine gave both equities and bonds a volatile first quarter. Nevertheless, most of the losses incurred were quickly recouped.

“The equity market is moving towards a bubble”, said Jeroen Blokland said during the annual Fondsnieuws Investment Outlook, organised by Investment Officer Luxembourg’s Dutch sister publication. High valuations and exaggerated growth expectations make the probability of corrections in 2022 very high. This statement did not meet with unanimous approval. According to Edin Mujagic, chief economist at OHV Asset Management, this is in fact the ideal environment for equities.