Tuesday's rebound difficult to sustain? GAM stock manager warns: market recovery only a "flash in the pan"

GAM Investment's global stock manager, Paul Markham, said that despite the rebound in the market on Tuesday, investors are expected to remain cautious and he described the current rally as "hard to believe it can continue." Markham maintained his existing positions and continued with a strategy of being long on tech stocks and short on bank stocks, while also expressing a positive view on industrial stocks benefiting from the artificial intelligence (AI) trend. Markham stated that frequent portfolio adjustments in times of geopolitical tensions can easily lead to losses in volatile markets. In an interview, Markham said, "For the market, the biggest positive would be the end of the airstrikes and major headlines related to war completely calming down." He believed that a change in the Iranian regime would be beneficial for the market. Afterwards, the market focus would shift back to U.S. monetary policy. Regarding hedging strategies, Markham pointed out that although gold has performed poorly during recent geopolitical tensions (mainly due to rising U.S. bond yields increasing holding costs), gold theoretically still has hedging value. He expected the price of gold to further rise, with a target price near $6,000 per ounce, and recommended investing in physical gold or gold ETFs, rather than gold mining stocks - the latter often see a significant increase in costs during emerging market rebounds. On the issue of inflation, Markham warned that continued high oil prices would start to have a real impact on inflation, spreading pressure beyond the UK. This will pose challenges for governments facing elections as living costs rise, and mortgage costs also increase.