The Financial Crisis

The ‘Credit Crunch’ - October 2007

We’ll be honest – we got the 1987 crash wrong, so Phil Sheppard subsequently spent several years studying economic collapses throughout history. That knowledge lay dormant until the beginning of 2007 when alarm bells started to ring for Phil. During 2007 and into 2008 Schaefer moved our Wealth Management Service© clients out of equities and into safe haven investments like Gilts and Global Bonds.  The performance is evident in the chart below:

SFM_gross_return

CLICK HERE for a larger version of the Chart

The ‘Second Leg’ – 2012?

The seriousness of the current financial situation is unparalleled since the 1930s, so there is little use in looking at business models of the past 15-20 years to predict what may happen next.

Unless politicians come up with some real solutions to the Global debt problem then we can expect the financial markets to react badly with greatly reduced equity values. Historically, debt bubbles deflate in three main stages – an initial collapse (October 2007 to March 2009); a ‘recovery’ (March 2009 to July 2011); a second and more damaging downturn (July 2011 to ????).

The Wealth Management Service©

Go to our dedicated Wealth Management Service© pages and see how this highly personalised service might be able to help you.

 
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