Over the period from the 1^st to the 31^st of January, 2016 the assets value of the WellMax investment portfolio increased by 1.31%, which means that last month the annual yield of WellMax amounted to 15.72% in EUR and USD. Thus, WellMax has shown its best result for the last 13 months.

In this picture you can see the monthly profitability of WellMax

Meanwhile, for the world markets last January has become the worst month for many years. There were pessimistic moods on the stock exchanges caused by signs of the ongoing slow-up in the Chinese economy, contradictory information from the USA, weak raw materials markets and absence of new investment ideas. In January capital funds abandoned markets, not only developing that has become usual for the recent months, but most attractive ones as well, including the US stock market – its capitalization went down by 2.2 trillion $ during the first 20 days  of the new year.

As we forecasted in our previous reviews, following the US markets, the European markets suffered losses - in January their net decline exceeded 6%. There is another our forecast coming to fruition: global price lowering on assets in expectation of the world economic recession seems to be more and more real.  Thus, some indexes prove that a significant downturn of the global stock market already happened in January. Among other things, it resulted in remarkable losses of many big investors and market participants. According to Bloomberg, the capital funds of the 400 most prosperous people in the world decreased by 305 billion $ for the first fortnight of January.

Why the WellMax investment portfolio has been breaking records of profitability over the months, while worldwide investors come down? To answer this question we need to understand, where the capitals flow.

In January the capitals actively tended to avoid risks. Most investors withdrew their funds from risky assets (first, shares) and reinvested them in protected securities (mainly, bonds). As a result, the shares quotation dramatically decreased, while the bonds quotation actively grew. The growth of the bond market became the main driver of the profitability of WellMax, since this kind of securities is 80% of the portfolio. Besides, we managed to earn from downward changes of some assets and indexes. E.g. WellMax investors received a significant return from quotation swings of the oil and gold-mining assets, the ongoing index drop of the US biotechnological enterprises and yuan`s devaluation.

What are forecasts? According to the analysts of International Financial Community, the yuan`s devaluation will continue, since the old drivers of accelerated economic growth in China become exhausted (ultra-low-cost labor force and large-scale infrastructure construction) and new prominent ones do not appear. Another factor promising to press on the yuan and the Chinese assets value is a huge joint debt of corporate enterprises, regions and China`s central government exceeding 28 trillion $.

A rising skepticism towards prospects of China`s economy as an engine of world economic development, problems disclosed in developed economies and growing geopolitical tension will contribute to nervousness and pessimism of the world`s areas. We suppose that this will continue movements of the capitals to defensive assets.

The raw materials market will remain weak and continue to cause difficulties for budgets of many developing countries. This year Russia, Kazakhstan, Brazil, RSA may face some problems when meeting the budget.  A range of oil-producing countries has already experienced some serious issues. Thus, it speaks for itself that Azerbaidzhan and Nigeria made recourse for help to the International Monetary Fund. All this makes possible further squeeze on currencies and assets of the economies oriented to export of subsoil resources.

For many months yet, aggravation of tension in the Middle East has not had the usual supporting influence on the state of oil prices. According to many analysts, “the prize for geopolitics” is felt less and less in the oil quotation giving place to other factors such as supply and demand balance, size of reserves, expected prospects for global industrial growth and development of resource-saving technologies. At the same time, we can see a famous psychologic effect from the fairy-tale about the boy who cried wolf: so many times there was said that the extraction and delivery of the Middle East oil may become problematic in case of conflict escalation in the region, if any, though still it has not happened. However, the situation in the Middle East remains obscure: fresh information about a possible land operation of the Middle East monarchies and Turkey in Syria lets us only guess about an outcome of the situation and its consequences for the energy resource market and economies of the countries involved into the conflict.