January 2020 Investment Review

Now we have safely got our feet under the table of the new decade, it’s time to look back to see how we fared in the last decade.  We are in the “twenties” now.  We have a name for this decade.  I think the last real named decade was the “nineties”, the “noughties” and the “tens” just didn’t cut it.  Let’s hope we are entering the “Roaring Twenties” once again.  Thankfully the “tens” weren’t terrible, in fact for investors I would go as far as saying they were the “Terrific Tens”.  There that sounds better already.

our central investment philosophy remains intact

I have believed for 6 years now that the Global economy is within a secular growth trend. Secular simply means long-term in investment speak. The more usual trend is cyclical, the one all financial commentators comment about. Cycles are much shorter term, typically expressed over a “seven year business cycle”. Cyclical trends still exist, but they are never boom and bust during a secular growth trend. They remain compressed, up a bit – down a bit. Here’s what I wrote in my January 2014 Investment Review. It’s well worth a re-read for my older clients and a first read for anyone who became a client since 2014. In short I believe the markets are set to expand gradually over a 20 or 25 year period. I believe it began in 2013.

so how have clients fared over the last decade?
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October 2019 Investment Review

I have been writing my quarterly investment reviews since January 2011. Then the new MiFID II regulations came along at the beginning of 2019. I couldn’t be sure that my reviews wouldn’t fall foul of the new European regulations, so I had to stop producing them. The quarterly valuations sent direct from the platform provider became a statutory requirement. The situation wasn’t helped when the GDPR regulations came along. For a while I was even unsure as to whether I could still contact my own clients. Were my blogs marketing? Did I require permission to continue to email you?

Back by popular demand

It seems my quarterly valuations have been missed by my clients. So having picked through the copious regulations, it seems that I can still email my own clients and I can add to the statutory MiFID II quarterly valuations without fear of breaching regulations. So a little belatedly, here is my latest quarterly valuation.

back to the start of the year

The year started on a low point with the markets fearing that Donald Trump’s global trade war combined with a Federal Reserve Bank intent on raising interest rates, was going to kill the US economy and send the US into a recession. That matters to us a great deal as our UK Stockmarket is basically in lockstep with the US Stockmarket. That fear caused many global markets to crash ahead of the year end. Currently the US looks likely to avoid recession, as do we in the UK (touch wood). The slow down has effected much of the world already, notably in China and Germany.

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April 2019 Investment Review

As we reach the end of another tax year, it’s time once again to look back and see how our expectations of investment growth have faired against the brutal reality of the past year’s economic turmoil. In my last blog, “You’ve been framed”, I explained there is little point in basing lifetime decisions on the previous 90 days gains or losses. Shortly you will receive your next 90 day statement, it will reflect a much healthier period, but please continue to ignore short-term performance when we are all investing over lifetimes.

Whats happened over the last 12 months?

It’s been a challenge to say the least. We sold down risk assets across our portfolios twice in the year to reduce the effects of an increasingly un-certain economic outlook. Only recently have we re-committed to use that cash to purchase further investments.

Last year will generally be measured by how much was lost.

As investors we are rewarded for our resilience. We need to be able to take it on the chin once in a while. My rule of thumb is that we will only make money 3 years out of 4. We measure three of those years based on how much we made. We measure the fourth on how little we lost.

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