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.

Currently these market levels have a large dose of recovery optimism baked into them. Bad news now wouldn’t be taken very well. So we are watching and waiting. We usually make more profit for clients in the winter months than we do over the summer, so the gradual drift was to be expected. This year however will not be a re-run of “Sell in May and go away”. Like 2020, 2021 cannot be considered a “normal” year by any means. Re-building our positions will follow shortly, once US investors shows signs they are not afraid of potentially rampant inflation, seemingly encouraged by the Federal Reserve Bank’s proposed inaction.

Nucleus Developments

In the end, despite the protests of some staff, some fellow IFAs and some shareholders, James Hay has taken over Nucleus, subject to regulatory approval. Relying upon Nucleus to be an efficient service partner to our business over the years has never been in question. Nucleus possesses such a “can-do”, positive work culture, across its entire team. Sadly what has taken over a decade to nurture may have been irreparably damaged in just a few short months. The confidence I had in the direction of the management has been dented. We will be watching very closely for any appreciable reduction in service standards.

Transact

Many clients have asked if a bulk move to Transact has begun as we hold relatively high levels of cash in our portfolios. The thinking behind the current high cash levels has been given above, but it has prompted some clients to ask if a move to Transact now would make sense before I commence re-buying.

It has been a steep learning curve for the team, getting to grips with the operations of an additional platform, but we have all taken it in our stride. One platform does pretty much the same as another and we have been experienced platform users since 2003. We are not yet confident with the day to day management of accounts on Transact to suggest a mass migration just yet. However we are steadily moving a few accounts of those clients who see the long-term wider investment potential as a welcome addition to what we are able to achieve on the Nucleus platform.

For those interested I have created a comparison tool which I will be rolling out soon on this website. I have for now added a short Transact introductory video for anyone interested, you can watch it here

£100,000,000

One hundred million pounds. That’s a very big number and an awful lot of money. It’s a significant milestone that we have reached together. Thank you for your confidence in our team to continue to look after all of those life-savings.

I have many clients ask me how I sleep at night making all of the buy, sell or hold decisions necessary to protect our savings and endeavour to continually make them grow in value. I never farm out those decisions and have been making all of those investment decisions since 2007. What we own, more importantly what we don’t own is down to yours truly.

This in not just other peoples money. I look after less than 200 families life savings, exactly as I look after my own families life savings. A mix of not letting anybody down, prudence, experience, education, discipline, fear, fearlessness, humility…. I’m sure anyone could do it reading and practising 7 days a week for just over 34 years. 😉

Here’s to the next £100,000,000! I’m sure it won’t take so long this time. But if it does I will only be as old as Warren Buffett.