A Portfolio For The Shorter Term

Only of limited use to the long term investor.

Cautious Portfolio Target

The goal of this portfolio is to attempt to preserve the long-term buying power of your savings..

A 2.5% per annum compound return is required to match the long term expected rise of Consumer Price Inflation.

Performance to Date

• Growth to our cautious managed portfolio has now added 85% to the original capital invested.
• Every £100 invested originally is now worth £185.

We believe it is virtually impossible to beat current inflation levels by utilising “lower risk” assets such as gilts and corporate bonds. With inflation and fixed interest rates now rising, significant falls in capital values of those gilts and bonds is inevitable. A combination of risk-free cash and lower risk shares probably carries too much risk currently for a truly cautious investor and holding a significant amount in cash can only reduce the buying power of life savings.

	2019	2020	2021	2022	2023
Cautious Portfolio	16.90%	1.76%	15.02%	-10.70%	2.23%

• The Managed Portfolio returns are net of all charges. It is the actual return received by clients.
• Any Index shown is a total return including dividends. It is a hypothetical return as it is not possible to invest directly in an index. A fair comparison would deduct both a fund charge and a platform charge which would cost upwards of 1/3rd of a percent (0.33%) per annum.

It’s important to remember;

• Past performance isn’t necessarily a guide to the future.
• The value of investments can go down as well as up.

What’s The Worst That Could Happen In The Future?

To answer this question about the future, there is no better place to start than by looking to the past. The performance chart above depicts what has actually occurred in a real portfolio since inception to date. The performance stated is after all management costs have been deducted. It is a true representation of the growth achieved by a client.

If you can accept the level of regular set-backs that occur within this portfolio when you have looked at the chart above, then it could be suitable for you. The next section tries to quantify the expected variation in highs and lows for this managed portfolio to give you a better idea of what to expect.

Our Measure of Portfolio Volatility

We make this projection at the end of each calendar year and was last updated 01/01/2023. It is an annual graphical depiction of the probability of the following years return. We use a technique known as Standard Deviation to measure the spread of returns.

• The middle Dark Green bar is an average continuation of the annual performance achieved over the last 7 calendar years, which has been 3.6% net of all charges.
• If past performance were exactly a guide to the future then we should end the year exactly with the additional of this level of projected growth
• However as the FCA insist, past performance isn’t necessarily a guide to the future.
• Most of the time, about 2 years out of every 3, future annual performance should lie somewhere between the mid green bar of 13.7% and the amber bar of -6.5%.
• We can state with 68.2% confidence that the return next year should lie somewhere between the extremes of these bars.
• Almost all of the time, 19 years out of every 20 years, annual performance will lie between the limits of the upper pale green bar 23.8% and the lowest red bar -16.6%.
• We can state with 95.4% confidence that the future value should be somewhere between the extremes of these bars.
• That still leaves the unlikely event that a 1 year return could come along once every investing lifetime. Once in 43 years the return could be higher than 23.8% or lower than -16.6%.
• Any potential investor needs to assess how this unlikely, but possible negative outcome, could affect their future financial plans

7 Year Standard Deviation of Past Returns

What’s My Bottom Line?

There is no bottom line. But in simple terms we believe you could invest your savings into this portfolio if you can withstand a potential 1 year loss of up to -16.6%. Annual losses will occur some of the years. We always expect that an investor remains invested for at least 5 years.

Superpowers

Free Withdrawals

Obviously withdrawals can be taken from any of the managed portfolios we offer, at anytime, including our AIM (Alternative Investment Market) and Go For Growth managed portfolios. There is no additional charge to take a single withdrawal or a one-off series of withdrawals (Never accept an admin charge from a firm to receive your own savings back!). Please give us 10 days notice to ensure any investments can be sold down if required, to provide cleared cash ready to be transferred to your designated bank account.