Recovery on Tuesday Fails to Sustain? GAM Equity Chief Warns Market Upturn Is Fleeting

Stock News
03/10

Paul Markham, Global Head of Equities at GAM Investment, indicated that despite Tuesday's market rebound, investors are likely to remain cautious, describing the current rally as "hard to believe it can last." The investment manager has kept his existing positions unchanged, maintaining a strategy of being long on technology stocks and short on bank stocks, while holding a relatively positive view on certain industrial stocks benefiting from the artificial intelligence (AI) boom. Markham noted that frequently adjusting investment portfolios amid geopolitical tensions can easily lead to repeated losses in a highly volatile market. In an interview, Markham stated, "The biggest positive for the market would be an end to airstrikes and a complete disappearance of major war-related headlines." He believes that a change in Iran's political regime would be favorable for the markets. After that, market focus is expected to shift back to U.S. monetary policy. Regarding hedging strategies, Markham pointed out that although gold has underperformed recently during geopolitical tensions—mainly due to rising holding costs from surging U.S. Treasury yields—gold still theoretically holds hedging value. He anticipates further upside for gold prices, targeting around $6,000 per ounce, and recommends allocating to physical gold or gold ETFs rather than gold mining stocks, as the latter often see costs rise significantly during emerging market rallies. On the issue of inflation, Markham warned that persistently high oil prices will begin to have a tangible impact on inflation, with this pressure spreading beyond the UK. This will pose challenges for governments facing elections, as living costs will surge and mortgage expenses will also increase.

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