InPerspective - Volume 4

The explanations for disorder on England's high streets in August have been varied and inconclusive, but those for the summer's pandemonium in financial markets seem clearer: the increasing jeopardy of the European debt crisis, the political gridlock in negotiations over the raising of the federal government's debt ceiling, credit-rating agency Standard & Poor's subsequent downgrading of U.S. debt, and mounting evidence of a slowdown in the recovery of the global economy which, according to the International Monetary Fund, is entering a "dangerous phase".

In the first article of this edition of inPerspective, we explain our outlook on economies and financial markets, and we discuss the implications of that outlook for our management of portfolios. In today's highly interconnected financial markets, which we believe are distorted by policy settings and hugely influenced by leveraged speculative flows, very real risks appear to exist for investors. We continue, however, to believe that the perspective provided by our themes and investment process will help us navigate those risks on behalf of our clients.

In our second article, we provide a summary of our recent paper, The case for a global approach to investing. We encourage you, if you have not already done so, to have a look at the full-length paper, which is available in both eBook and pdf formats, as well as our accompanying webcast, at www.newtoncapitalmanagement.com/whyglobal

We hope you enjoy this edition of inPerspective.