Included in this edition of our e-newsletter:
BREXIT UPDATE – ANYTHING NEW AFFECTING YOUR MONEY & INVESTMENTS?
As last time – there is little which can be added. That said, Sterling has been brighter and values generally have improved so all that is good but is that a relief rally and some may argue relief at ‘what’? I perceive some is simply those with money (including private investors) beginning to realise that whatever happens, the world is not going to end on 29 March at 11pm so on that basis, many things are far too cheap. Why wait till they have become far less attractive in price really has to be the question to pose. Remember too the yield – the income these real companies pay to their owners (shareholders) from their real profits trading with you and me every day.
ORGANIC INVESTMENT MANAGEMENT LTD
Welcome formally to the new clients joining us from Organic. As they will know, following our appointment in the middle of December, Organic had administrators appointed at the end of December so it was very fortunate that we had taken-over the ongoing investment management in advance of everything coming to a juddering halt whilst very expensive external third parties started to become involved.
We are working hard on assimilating the information we are finding and in terms of managing the investments which have passed across. These include the two suspended Dublin-based UCIT funds and we have been in touch with the administrating company and are also in touch with the FCA and the FSCS in relation to such matters as compensation which will be due, as there have indeed been some rather spurious purchases undertaken and some of those UCIT assets will be irretrievable and some illiquid so impossible or very difficult to sell at equitable prices.
However, we have already reassured Organic clients that despite what some with ulterior motives may have been suggesting to them, for most clients the picture is not anything like as bad as worst feared. Unfortunately there are some vultures which have appeared and these range from claims’ management companies keen to take up to a third of any compensation to which these poor clients will be entitled in due course or others who might be culpable in relation to some initial faulty advice and encouragement to acquire dubious investments in the first place. We are working with the other genuine and ongoing advisers to endeavour to ensure they are as informed of progress as possible. Certainly we are NOT suggesting that a swift transfer away of your capital from us is wise and in your best interests to do – till we know what the position might be in regard to those suspended assets. Any adviser encouraging that now cannot be acting with the benefit of full information disclosure and indeed, are they simply doing so for ulterior motive and extra financial reward for themselves out of those poor clients’ troubles in pretending that is a good idea? We should like to think not.
We have been in business now for over thirty-three years and it really angers me when we discover such shenanigans (being rather polite) and how these problems are used effectively to exploit people and defraud them, at worst. Some of these clients have been in touch with us too to note other ‘investments’ which they were encouraged to consider like specious Cape Verde Property Loans and things which no trustworthy financial adviser would have encouraged to the clients involved – or at all in fact. It is the sort of ‘stuff’ about which we warn readers of our myriad posts constantly.
In due time we shall hope to relate properly to each of these new clients but clearly it will take a while as there are many of them but meanwhile I hope they have the reassurance that we have their best interests at heart and that we are working hard behind the scenes to ensure that they receive the care and service they deserve and also that when it comes to compensation, that it will be appropriately resolved for them and that they do not have to share it with some other parasitic body, as it should come to them automatically and even then, in due course there are free services with the FOS and the FSCS to assist them. We look forward to sharing with them the service and integrity for which we hope we have become renowned and meantime that we are there to hold their hands with reassurance which I hope they feel they can trust. However, to reiterate, whatever happens the majority of those clients’ money is totally safe and if there have been proven misdemeanours and negligence, they should receive compensation to put them in the position in which they should have been and it is only the length of time it will take for that to happen.
PREMIER INFRASTRUCTURE INVESTMENT TRUST
How many of you remember me tipping this Trust in November and because the administrators were changing and that this was likely to result in selling pressure driving the price of this rather boring collective investment downwards? Premier’s clients’ exposure is now down below 8% so the changes have been effective and of course now, the investment has returned to some semblance of normality. We bought as much as we could justify for our clients when the price dropped then to around £1.02. Today, after a chunky income payment too, the shares are £1.25 to buy. The latest underlying asset value (what you’d receive if the Trust decided to sell all its investments and return the cash to investors) is £1.35. So the share price to a new investor has risen a whopping 22% since early November (ignoring the large dividend too). Yes, some of this has been the markets but most was the technical opportunity about which we alerted all our readers. It’s the sort of thing which we are considering all the time – all opportunities to try to enhance our clients’ returns. This otherwise quite dull Trust is our twelfth largest holding now – I wonder why! However, as we believe in very large diversity to protect better against risk and also to pursue as many opportunities as possible, no single client will have an excessive exposure to the Trust but this just shows the sorts of reasoning that can go behind an individual selection for them. Is that how your investment adviser or manager makes his selections…? (As the name suggests, it invests mainly in utility companies across the world and pays our investors a high level of income – presently over 8% pa. Yes, there is some gearing which affects the capital results too of course).
HOLIDAY LODGE INVESTMENTS
Remember my warnings on these? I continue to flag warnings. You may have seen that a Devon-based group has just gone bust so I wonder what will happen to the hapless owners of the lodges on those sites – let alone the values of their ‘investments’ – https://www.devonlive.com/news/devon-news/job-losses-holiday-park-firm-2449537. As I have said all along, it is fine if the project is presented honestly and fairly and without uncovered promises and guarantees but in the main, they are not and the sales’ approaches adopted border on the fraudulent.
I was intrigued by an article by 7IM last week. It shows how people can overpay for a concept, this time with inflation-protection. If you give the Government £100 now, in thirty years it will repay you £64.36, allowing for inflation. The inflation-linked gilt has a ‘real’ yield currently of 1.46%. If you buy some you will lose 1.46% of the real value of your investment every year. Your pension funds and other large investors are holding billions of the stuff – we don’t hold any as curiously we see better value elsewhere and indeed, there are other ways of buying assets to protect against the almost inevitable resurgence of inflation which otherwise will gobble-up the money you have at the bank and building society.
Stock market investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.
To remind you, why do I send out occasional emails? Because everyone can save money. We have no connection with any companies mentioned and you have to make your own contacts and satisfy your own enquiries. What is in it for us? If we can prove that we are knowledgeable and that our service and advice have good value, then you might contact us for professional financial planning and investment help. You don’t have to do that though and there’s no charge for emails. If simply they save you money, then accept them with our compliments! However, you’ll know where we are!
If you have any queries of any form or indeed any subjects you think I could include, please contact me. I also refer you to our website www.miltonpj.net. We celebrated our thirtieth anniversary in 2015 and have been publishing a well-respected independent column in the local Paper for most of that time and free client newsletters as well.
Do not forget however the usual caveats – this is not ‘advice’ and you are encouraged to seek that before embarking upon any financial route involving investments, etc.
My best wishes
Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB
Chartered Wealth Manager
Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers