April 2017 Investment Review

What’s happened so far this year?

Global markets had already rocketed forward by the end of 2016. The consensus view was that such a meteoric rise was not likely to continue into the new year. However the FTSE 100 consolidated much of the 2016 climb, finishing the quarter well off it’s peak, but still up 1.3% higher at 7303 points, adding 91 points over the three months.

We made no changes to any of our portfolios over the quarter, except that we had to give up our Fyffes shares in exchange for a very generous 45% profit. So far we have not found a suitable replacement.

Nobody enjoys setbacks, but smaller setbacks should be embraced as being healthy, allowing growth to continue for longer periods. We felt no need to increase cash in the portfolios as we already hold sufficient, but neither did we wish to commit any new investment capital to such highly priced markets. Let’s not forget that we are edging closer to the Summer months when we tend to lighten our exposure to shares. It benefits us 70% of the time.

How have we done over the last quarter?

All clients have had their personal quarterly valuations. But here is how the four model portfolios that we operate have performed over the quarter and the year, where no contributions have been added and no withdrawals have been taken. I have added the FTSE 100 results also for comparison.

Portfolio

3 Months

12 Months

FTSE 100Cautious
Moderate
Aggressive
AIM
+1.30%+2.72%
+4.70%
+6.43%
+13.39%
+18.53%+7.17%
+15.97%
+24.58%
+39.42%
Am I still in the right Model Portfolio?

We each can accept a different level of investment risk, but it is impossible for us to run an infinite number of Model Portfolios to exactly match every individuals attitude to investment risk. So we run just 4 model portfolios. Our attitude to many things in life remains the same from cradle to grave. Our attitude to Investment Risk seldom changes unless we experience a bereavement, divorce, health issue or job loss. However from time to time it is worth taking the time out to undertake another risk assessment. After all, every client continuously builds their investment experience as the years go by. You are building it now by reading this blog.

I believe there are a couple of golden rules we need to observe to ensure we don’t get carried away after a period like this with it’s strong investment returns.

  • Don’t think about the regret of not making as much as others, instead remember how you felt last time things collapsed. If you were not so uncomfortable then, that you felt a need to take action, then you were in the correct Model Portfolio.
  • It was Warren Buffett who said;
    “In our view, it is madness to risk losing what you need in pursuing what you simply desire.”

Here is a link to our risk profiler should you wish to take another test. Before you take it please read this and this.

The Usual
  • Past performance isn’t necessarily a guide to the future.
  • Investor’s Capital is at Risk – the value of an investment can go down as well as up and investors may not get back their initial investment.
  • This is not general financial advice. After all anybody can read this. I may not even know you. I only give regulated financial advice on a personal face to face basis

Have a great Easter break.

2 Replies to “April 2017 Investment Review”

  1. In a potential turbulent environment you have done extremely well Howard. As you say the clever bit is making sure we hang onto the gains. We are benefitting from both market gains and exchange benefits, you will do very well to keep these two balls in the air. You have my upmost trust.

  2. Hi Peter

    Thank you for your continued vote of confidence. I’m trying to control currency loss as Sterling slowly recovers by holding pretty much the majority of our portfolios in domestically listed shares. Many of which derive the majority of their income from UK business. The exceptions are our sector plays on Technology & Pharm. The US are the global leaders, the main reason the Dollar is so strong I would suggest. Fortunately the Dollar will remain strong in the near term with the geo-political unrest and the potential return of over £1 trillion dollars – much of which is held in Eire in Euro’s. That won’t help the Dollar v Euro when Trump strikes the deal to repatriate that money.

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