January 2016 Investment Review

We always measure our quarters and years in-line with the tax year which starts on 6th April. So this quarter was measured from 6th October to the 6th of January. The year was 6th January 2015 to 6th January 2016. I mention this for a reason.

And of course the gains below are true gains. They are calculated after all charges and fees have been settled.

Here are the facts

Over the last quarter we all made a little money.
Cautious Clients up 0.97%
Moderate Clients up 1.23%
Aggressive Clients up 1.63%

Gains for the whole of 2015 stand as follows.
Cautious Clients up 5.21%
Moderate Clients up 7.36%
Aggressive Clients up 8.63%
A good result considering the investment environment out there. Certainly enough to ensure clients are able to carry on without adjusting their expenditure plans.

As we measure to the 6th January, these returns include the start of this year which the Daily Express reported as “Worst stock market start of the CENTURY” Which was nice but probably inaccurate. Do they mean for 100 years or for this century which would be for 15 years? Anyway, it created a neat link to pensions and a huge plug for one of it’s largest advertisers – Hargreaves Lansdown.*

Here is how the FTSE 100 performed

Over the last quarter the index of the largest 100 shares fell.
Down -3.88%
Over the year the index fell -2.88%

Here is how the media reported the fall

The BBC used the calendar year and got the story out pretty sharpish on New Years Eve.

London shares lose 5% during 2015

Man the lifeboats

But the horror of the UK’s largest shares continues into 2016. (The FTSE down a further 2.85% today as I write this) The index now stands at 5,900 points. Some huge fallers amongst the biggest companies where their future profits are tied to China.

Anglo-American, Antofagasta, BHP Biliton, Glencore, Rio Tinto. All resources companies who dig stuff up from anywhere but the UK and sell primarily to China, which the last time I checked was also outside of the UK. Yet those mining company shares live on the FTSE 100 index. Other big fallers today; Aberdeen Asset Management and Old Mutual, both fund managers with large funds that hold Chinese shares.

The largest faller amongst the list above is down 10% today with the best of the list above still down 4% today. No wonder the index as a whole is down 2.75%.

Now when there are such big moves in the markets, nothing grows. Every share takes a hit. But by avoiding the big hits we will continue to prosper.

Back in July I wrote “Same side of the boat” It explained my investment allocation positioning for the rest of the year. It’s worth reading again so I don’t have to repeat myself here. We made money. I’m afraid that the boat didn’t slowly right itself as I had hoped, and it continues to sink.

In 2016 we will be out picking up the grateful survivors. Mining Index anyone?

P.S.
Stand by for the “Buy Gold and Ammunition” stories to start in the USA ?

*Note to self:
Do not refer to the garbage written in the Daily Express ever again. Never mention Hargreaves Lansdown. Are you thick? They are a competitor!