Sad loss of our Queen

The passing of Queen Elizabeth has been a huge loss to the UK

What a very sad day on Thursday. We shall all miss our lovely Queen Elizabeth and our thoughts and prayers go out to her Family and especially for King Charles III with new role and responsibilities.

Rest well Ma’am. There has never been a world leader, politician, businessman or religious person who has held such an important and effective role for so long, fulfilling the responsibilities it demanded in a professional and ethical way for that length of time, travelling and communicating as much as has been obliged by the job.
She will be impossible to replace and has been a colossal influence on the lives of so many, both at home and in the Commonwealth but respected across the World. She has also been an anchor to the stability which the UK has represented to the World too and this includes the financial integrity from which our Country benefits.
Never in history has someone’s image been reproduced so many times on stamps, coins and so on – and it is unlikely to be repeated

Welcome too to a new Prime Minister who has a baptism of fire. I wish her and her new Cabinet the very best indeed – for all of our sakes.

Back from the Conference

Felix and I have just returned from a very good Conference update over a couple of days. They are always intensive and very tiring but nice to catch-up with colleagues and competitors and some excellent calibre presenters and fund managers etc. I shall share some of the adages over the next few months for your illumination!
There were useful parts and a consensus that the worst is behind us, with markets offering very sound long-term value, especially the UK (where’ve you heard that before!). It is pleasing to be able to say that sentiment seems to have turned upwards a tad too on the markets – though time to buy is when it is pessimistic of course. However, the US’s latest inflation statistics and interest rate concerns may stymie that party temporarily.

There were a couple of entertaining points in the breakout sessions we took it in turns to attend. One senior manager’s presentation (he’s head of almost £30billion of European funds) had a chart with what I could see were the wrong headline yield figures within it for the World and FTSE indices. Fair enough, someone in ‘HO’ will have pulled the charts together, but I queried them politely to see if I had misunderstood what he was comparing. He challenged me as to why I thought they were wrong… but clearly he didn’t ‘know’ how wrong they were…I googled the exact latest ones for him at the end of the presentation so he could correct them for everyone else over the two days.
Then another fund manager, responsible for a £7billion fund, who was talking about the Group’s exposure to Peleton, Rivian and Wayfair. Whilst we have no exposure nor interest in these three, as the conversation developed, I knew more about each’s recent past than he did… it is bemusing sometimes!
Just how much do these chaps really know about the colossal funds over which they have at least some responsibility! Just how much blind faith do investors place in the giant organisations with which they entrust their money?   I don’t mean to laud our prowess but do our own clients know really how much we understand and know about what is going-on in the world of finance; maybe we don’t promote that enough? Most advisers and clearly some giant fund managers don’t seem to know as much… hmmm. It’s not what you know either, it’s then how you know how to apply that and that’s our dynamic strength.


There is some good news in that oil prices are still trying to push downwards. However, the ONS delivered a blow to Rishi Sunak by disallowing the first £400 rebate against energy bills as a cost cut so that won’t pull the headline rate down. Why were such things not checked first? Doling-out cash does not cut inflation. Cutting headline prices (and the taxes in them) does – it is not rocket science.
Now is when we need that type of activity, not more ‘hand-outs’ of any form where sadly too many seem to be spent on what they should not be either. Cutting that headline rate then cuts the cost to the State and businesses as well as pressures on employment and pension rises linked to the headline, as well as the inflation-linked borrowing costs the government has and so it goes on.

US Dollar strength

The US Dollar has really proven it is still seen as a port in a storm. It has been hitting multi-decade highs against major currencies and Sterling is as affected. This is deterring us from increasing exposures to US Dollar based funds and it may be wise to trim some too as it won’t last, even if currencies can move to unexpected extremes too. Why avoid? Because the underlying assets may be cheap, but we don’t want to lose 20% or more on the currency translation.
The other problem is that so many commodities (notably energy) are priced in Dollars and thus the weaker your home currency, the more inflation you are importing. Last year we gained as Sterling rose, this year it adds to our woes. It will reverse and we shall win again but for now it is yet another uncomfortable issue facing our new PM.
Curiously, in general terms though, shares of UK companies earning much from Dollar economies have not been rising despite the bigger profits they will be making and so far, US corporations and investors have not been filling their boots with UK, European and Japanese companies as that would be very wise whilst they are so cheap in Dollar terms.
Against Sterling, the rate is the highest since 1985, a rate from which it reversed by effectively half in a very short time afterwards. It could happen again – the balance of mathematical probability suggests it will.

The tail

We have a vast array of different investments. They are all selected initially because they have special ‘value’ properties. Some exposures are bigger than others depending on what they ‘are’.
Most are mainstream quoted funds (eg Investment Trusts) but even then, we spread clients’ risks very widely indeed as even with the biggest and apparently ‘best’, something horrible can go wrong sometimes, like the Woodford saga. We avoided that altogether. Everything we buy is tradeable on the London Stock Exchange too, ‘readily realisable’ and liquid.

However, within this long list, we have some esoteric assets like the actual commodity ‘uranium’. Most investors out there won’t even have that on their radar (nor how on earth to buy it) but clearly there are special reasons for some exposure.
We also have an investment in Turkey. Did you know that the Turkish index has been recovering strongly since the 20 December 2021 low? I don’t expect you did as not many follow it. However, our Turkish investment has doubled in Sterling terms – yes, some is recovery from higher levels at which we bought but this is the highest since we have had it and we kept buying all the way to the bottom. Still, if only represents a tiny proportion of our clients’ total assets (less than 1%) and indeed even our biggest mainstream holding is only 2.36% of those assets!

This vast diversity (at no extra cost to clients as all charges are percentage based with no minima) protects us and our clients when something like the awful Blue Planet saga happens but it also means that even our smallest clients can have some exposure to something like ‘Turkey’ with negligible risk to them should it falter but when they come good (as we hope of course!), then it makes a real difference to their whole portfolio and is not ‘high risk’. There aren’t many investments which have doubled in the last nine months, I can tell you!
If you are not with us, what sort of tail do you have and are these things all manageable and cost efficient like they are in ours?


You may have heard of the old ‘60% shares, 40% bonds’ investment adage over the decades and it has worked pretty well. The idea is that you methodically rebalance according to which is up and which is down. All the big portfolios, charities, pension funds and so on would have this sort of strategy and if one fell, the other rose and so on and thus protecting a balanced overall return.
I could say that up till a few years ago; we had something similar but when interest rates began to see such record lows, we moved away from traditional ‘fixed interest’ as it was just too dear and the future for it looked bleak and worrying. Yes, we were far too early but thank goodness we stuck to our guns. This ‘safe-as-houses’ balanced strategy will have lost investors 14% this year, the steepest ever losses for this strategy (even if better than it looked in June at -20%).
The crucial thing too is that it isn’t going to improve. Investment Grade Bonds are still far too dear and the likelihood is for further losses. Yes, our strategies may be down too but not anything like as bad as that and with many redeeming spots as well.
So if you are not with us, have a look and see what’s under your bonnet and don’t be fooled by complacency which worked pretty well up till about 4 January 2022. And likewise, don’t be fooled by the temporary gain you may have enjoyed from the US Dollar as both bits could come tumbling-down at the same time. We’ve taken action in anticipation.

The best investment you’ll ever make

Yes, I am selling you the best investment you can ever make and do you know what? It is absolutely free. Sadly in life, so often people, you, me, are impetuous and don’t have patience. Yes, that investment is ‘patience’ to see-out what it is in which you have invested.
Yes, this can be true in relationships as well, big purchase decisions like our homes and legal or employment situations but no, I am not confusing patience with ‘apathy’ or procrastination (and often in life we must assess situations and take immediate decisions as well). This is an active decision to be patient.
We do (sadly) sometimes come across some very silly people who do daft things like selling £100 bags of Pound coins at give-away prices just because they can’t wait another day, week, month, year, couple of years for the value to be unlocked. If nothing has changed from your initial decision to entrust some money to something, don’t sell it because your impatience is getting the better of you!

We have so many investments in our client strategies where it is indeed just time for them to be properly unlocked. No, they won’t all ‘happen’ but as sure as eggs is eggs, many of them (most?) will, simply because of the underlying economics of why they are undervalued in the first place and someone will, at some point, decide to reward our patience because they will grab the biggest part of the opportunity accessible to them and buy from us.
Just imagine if last December we lost patience with our Turkish investment and sold-out ‘cause it is rubbish and under-performing’, we’d have missed doubling our money for clients. Yes, it can be very uncomfortable sitting in something which doesn’t do what we hope it will do in the short-term but that’s no excuse to dump it and chase something else which is very popular, has risen lots and which is riding for a fall because it’s too dear!

Just imagine, if you can understand this simple principle and recognise ‘it’ in yourself and your investment decisions, it is likely to be one of the most valuable financial lessons you will ever learn.
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