We always note that the past is just that and decisions going forwards are what count. Sitting in something just because it is ‘there’ is not the correct thing to do – it has to be reassessed and also considered in the light of tomorrow’s opportunities. Too many investors out there are ‘just sitting’ at the moment (many basking in ludicrous returns from speculative situations) and a rude awakening is likely for them ahead – ‘expect the unexpected’ said Barton Biggs of Morgan Stanley. Anything which has scraped the sky is vulnerable to an Icarus-style falling to earth. Anyway, why remain over-exposed in extended, over-priced situations when there are cheap, fundamental value stocks to buy anyway and there really are loads of them? Rest assured, we shall be gravitating away from those we believe are more fully-valued and into what we think will generate best returns going forwards – isn’t that what our clients are paying us to do for them? There’s no ulterior motive for us after all. So, buying models are changed, new stocks introduced to protect values and generate a good level of income (over 7.5%pa on one of them and with growth prospects too), further sector diversification (so clients are even less correlated to mainstream shares) and a few strange ‘technical plays’ with big discounts, etc. Then I have to sell some things to raise money so I can buy our latest best ideas, often bought when no-one else wants them.
We constantly consider market valuations, economic prospects such as inflation, interest rates and exchange rates and continue to adapt our investment strategies accordingly. That might mean promoting certain stocks up our buying lists if valuations become more attractive and relegating others where we have enjoyed a better run. As a comparatively small wealth manager (with a shade under £200 Million under management), our ability to react swiftly to changing conditions is a great advantage over the “big boys” who simply cannot shift hundreds of millions of pounds worth of stock as rapidly for example. This same fact means that we can acquire shares in attractive companies that are simply too small for the large investment houses where a typical 2-3% exposure would require them to buy most of the company! We can also boast the same investment manager over the firm’s thirty-five year existence which has delivered consistency in approach without the huge turnover in stock (and extra costs) that we see elsewhere when investment managers change and a new strategy is deployed. To find out more why not request one of our Investment Brochures or you can visit our website and download the Brochure from there.