In July, the financial markets continued to display positive sentiment. Global equity markets experienced noteworthy growth despite slight turbulence at the beginning of the month. By the end of the month, they had reached their annual peaks – as measured, for example, by the S&P 500 index or the MSCI World Index. This index, which tracks approximately 1,500 of the largest companies from developed economies worldwide, has risen nearly 18% in USD since the start of the year. After a challenging previous year, this partially heals the wounds on investor portfolios and morale. Once again, it has been proven that remaining steadfast in investment positions during downturns, avoiding emotional reactions, and refraining from selling at a loss are crucial for equity investments.

What Drives This Positive Trend?

One of the main factors is the slowdown in inflation. In the U.S., inflation fell to 3% in July, while in the EU it dropped to 5.3%. Finally, even in the Czech Republic, inflation declined to a single-digit value – reaching 9.7%.

Index Growth Chart: S&P 500 (blue), MSCI World (red), STOXX 600 (green)

The Impact of July on Our Portfolios

Last month had a strong positive impact on the equity portion of our portfolios. We observed growth in global (U.S., European) developed equity markets. The bond portion of our portfolios was relatively stagnant or experienced slight losses due to a minor increase in market interest rates.

Overall, our portfolios, expressed in CZK, grew quite solidly, mainly thanks to the rise in equity markets virtually across the globe. The weakening of the Czech koruna against the euro also contributed positively.