While we huddle, here’s my guest column on oil

Genevieve Signoret

Letter from the President

Happy New Year!

You’ve been so patient while awaiting our revised oil price forecast. I thank you. I need just a few more days. Meanwhile, you can click here for an article I wrote for Offshore World with our Advisory Board member Jenik Radon presenting two scenarios for oil prices in 2015–2016 and explaining why I expect oil to start recovering in late 2016.

Our short-term model[1] and client portfolios hold some long-term non-U.S. developed market investment grade bonds that in local-currency terms are performing extremely well. Sadly, however, owing to exchange rate movements, in U.S. dollar terms, they’re crashing. The good news is that, the day the dollar falls back, these holdings will provide some protection.

Of course the best thing that can happen to our short-term portfolios is for energy prices to recover. Second best and in the short run more feasible would be for them to stabilize.

With oil prices falling, U.S. Treasury Inflation-Protected Securities have slid in price also. We see this as a transitory buying opportunity, one we’ve already seized to add rungs to client bond ladders to pay them a steady stream of purchasing power after they retire.

You’ll notice that, on currencies this week, we were silent. We’re huddled here revising our exchange rate views along with our outlook for oil prices.


Previous Letters from the President

Where the peso’s going and what to do (2014 15 12)
U Turn (2014 08 12)
Prices falling? By rebalancing, buy more (2014 01 12)
Are you saving enough? (2014 11 14)


[1] Read descriptions of these portfolios here. Clients receive details on their composition in addition to individualized strategies and portfolio management services. To request more information, please write to patrimonial@transeconomics.com.

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