Precious Time

We all treat our time on this planet like it is infinite. We all know it isn’t – but we live in a suspended state of denial, virtually every day of our lives. Occasionally we come across something so real, that whilst it isn’t ground-breaking, the reality literally stops us in our tracks.

Freedom Day

As the Nanny State starts to withdraw from attempting to control our every move, hopefully from the 19th July, battle lines seem to be being drawn once again.

We live in an increasingly polarised society. “Remoaner” v “Little Englander” continues to roll on and on, now it will be joined with “Selfish, reckless, non-mask wearing, conspiracy theorists” who can live with Covid-19 v “Petrified, selfish, stay at home, I’m alright Jacks”, who believe Zero Covid is possible. I’m not going to try to sway anyone towards my way of thinking, because I haven’t the time, there really is no point as positions are more or less fixed and I could equally be as ill-informed as the next person anyway. However I do want to add some context to what you will be reading later in this blog.

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Goodhart’s Law

Investment Advisers will soon be mandated to take Environmental, Social and Governance factors into account when recommending investments. I will tell you now, the rules will prove to be as expensive to comply with, as they will be unfit for purpose. The new rules will fall well short of what the legislation is trying to achieve. Currently although there are many ESG measures out there, we have found no ESG benchmarks that we can trust and that are not open to abuse.

When a measure becomes a target, it ceases to be a good measure.

Charles Goodhart

Have you bought an ESG friendly portfolio or fund already? Whoever sold it to you probably has never heard of Goodhart’s Law. They haven’t considered that the measures they apply have been gamed.

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May 2021 Update

The team have been busy since my last blog, tidying up all of the paperwork after the conclusion of the tax year. That end of year project was swiftly followed by helping those clients that have surplus funds in their General Accounts to use their 2021/22 ISA allowances. May as well get a whole years additional tax-free growth if possible.

The Markets

I have taken the opportunity to have a Spring Clean and sell down somewhat, without immediately buying the replacements. 7000 points for the FTSE 100 index has been and remains a psychological barrier, as does 35000 points for the S&P 500 in the US. A certain level of resistance is reached at these round numbers. We often see a repeated “knocking on the door” around these levels. It’s more than likely that as global markets have accelerated higher, they now look to have got a little ahead of themselves. Looking back over previous early market cycles, a rip-roaring climb in year 1 usually results in a period of chop in year 2 before markets resume their climb higher again. This sideways up and down chopping action isn’t a bad thing, the alternative is simply a bigger drop.

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