Investing during volatility, property & Vodafone : Companies and Markets Show

This week's Companies and Markets Show explores investing in volatile markets, focusing on real estate REITs and telecom giant Vodafone. Landsec, a FTSE 100 REIT, reports solid earnings growth and rental increases but faces challenges in shifting from offices to shopping centres and residential developments amid rising build costs, regulatory hurdles, and elevated debt levels. Despite a large discount to NAV, the company’s long-dated debt and strategic pivot offer some resilience. British Land is seen as a slightly better option due to its stronger London office portfolio, more advanced pivot into retail parks, and stable earnings outlook. Meanwhile, Vodafone’s mixed results reflect progress in simplifying its business—particularly in the UK and Africa—while Germany remains a drag. The absence of a new buyback programme, despite a 70% share rise, disappointed some investors, though the company is reinvesting in its UK operations and Africa, where double-digit growth is expected. The episode concludes with a deep dive into scenario planning, arguing that in an era of unprecedented uncertainty—driven by geopolitical tensions, energy shocks, and inflation—investors should abandon prediction in favor of preparing for multiple futures, especially stagflation, which threatens the traditional 60-40 portfolio. Gold, alternative assets, and strategic rebalancing are highlighted as tools to build resilience across uncertain outcomes. Key takeaways include: 1) REITs like Landsec and British Land are sensitive to gilt yields and require careful analysis of dividend yield versus risk; 2) Vodafone’s turnaround is underway, but investors should monitor Germany and the impact of capital reallocation away from buybacks; 3) Stagflation poses a unique threat to diversified portfolios, making scenario planning essential; 4) Gold and alternative assets can serve as hedges in high-uncertainty environments; 5) Investors should proactively rebalance portfolios to withstand multiple adverse scenarios rather than rely on forecasts; 6) Africa is emerging as a key growth engine for Vodafone; 7) The 60-40 portfolio model is vulnerable in stagflation; 8) Mental preparation through scenario planning reduces panic and improves decision-making in volatile times.