I am still reeling from Silver’s 130% increase in 2025. Gold was a mere 53%. And yes, it has continued – £1,000 of silver on 1/1/25 is now £2,960 – I am becoming speechless.
We have trimmed some of ours but still hold over £3million but as noted, we can’t hold it any longer as a ‘defensive’ asset as it is not and nor is it ‘undervalued’ by any stretch of the imagination.
Gold is the same regardless of present geopolitical tensions. Mark my words, supply of these things has already increased dramatically to meet the higher prices. Did you know that Venezuela has the largest gold reserves in Latin America but it sits upon an estimated 10,000 tons of gold in the ground too, more than the US’s present stockpile? It is suggested that Russia has the biggest unmined supplies, followed by Venezuela, Australia, South Africa and then Indonesia.
Of markets, we have not only done well with miners which were far too cheap anyway (and hence why we had some and Trusts connected to them, recognising we have been waiting many years for things to happen, albeit being paid handsome dividends meanwhile) but the next best sector was Latin America, an area to which we had also increased our exposure already even if, as ever, that would remain a small element as it is somewhat more esoteric.
Emerging markets generally also enjoyed a useful bounce and again, we have representation, so all these things have helped to pull our performance up nicely by its bootstrings but some being from not the sort of places where most investors had exposure at all (though now they are rushing to participate). Indeed, the ‘Magnificent 7’ were way down the list at ‘only’ 16.2% and safe US Treasury Bonds a mere 0.5%. Bigger, ‘quality’ European stocks also hit a sad patch, actually losing 11%. Imaginary Bitcoin lost 12.9%.
Terry Smith, much lauded by retail investors and who has done very well when looking at the whole time since inception, has been having a torrid time for a while too. His mainstream fund generated a mere 0.8%, so the ‘fifth poor year’. Adding insult to injury, he’s not cheap at all either, so still doing very well out of the reduced £16billion managed. Consequently, investors are leaving and that adds extra pressures as ‘good’ assets need to be sold to meet redemptions.
I shall have to touch again on the ‘cult of the star manager’ and the maths of percentages which can be self-fulfilling… (ie in nominal terms has he made more money for investors than he has ‘not made’?). We have never had any of his funds but yes, have some great fund managers across our strategies too! Think about it – if you start a fund with only £100 and it trebles though speculative success, that is ‘200%’ of gain and which sells the story to new investors keen to emulate the initial results. The 200% figure is always there regardless of how good or bad a much bigger fund becomes later).
I am reminded that it seems ‘most’ investors and advisers buy or hold funds (or assets) on the basis of what the funds did before, even making inane selections based on ‘top performances’ over past years. I am not quite sure what ‘skill’ is involved in that and by historical grounds, what justification too as it so often means chasing the herds, buying too dear and of course selling too cheap.
No, you don’t ‘do’ investments on the basis of superstition but again, so many advisers seem to have little idea about what’s been going-on or what the future might hold, or having fundamental reasons for buying or not buying something. They just sell you a ‘fund’ (for a fee naturally) as it is there and theoretically it may even be ‘cheap’ (whatever that means).
For we ‘value investors’ of whom there are not many of us still around, we aim to buy tangibles and often that comes with a handsome income payment whilst we wait patiently. At the moment too, we believe that strategy is a deep and necessary safety against major corrections in the over-hyped areas.
However, I regret for clients we shan’t be able to expect 130% from one of our mainstream boring investments in 2026, like 2025… though in 2025 our largest holding, a fund (so far untrimmed too as we are running it) did manage almost 50% and well, that was quite enough, especially as it had added further double digit gains in 2024 and with income to boot.
Markets – chasing dragons or being cautious
I may not agree with all the content in Schroders’ recent article on the subject for 2025 but the sentiments resonate especially well presently:-
‘Being active but playing it safe, has worked extremely well for investors in global equities’.
Our clients and readers will know that for quite some time, our emphasis has been on ‘downside risk mitigation’ as opposed to chasing what we consider to be seriously over-priced ‘momentum’ assets, especially in the US and the tech areas. We continue that approach despite 2025 being a year where more fundamentally-based markets (like the UK) did better than their US counterparts though valuation extremes remain and concentration risk with the US remains serious.
I have said before but many investors will not realise that their placid funds have such a concentration to all the same assets. They read that ‘these’ things continue to have excellent potential but in our book, the valuation is seriously awry and anyway, if there are far safer things, boringly valued and more, on base and traditional fundamentals, then we don’t have to take those risks anyway.
However, as the headline notes, that doesn’t have to mean the ‘performance, even if potentially ‘short-term’ so far, is lacking. This is despite ‘waiting’ for an almighty correction from the US which will rebalance global equities and whilst all markets will be affected, the size of the US will mean it is affected by much more than other markets which did not share the excess of exuberance as demonstrated over there.
Regardless, whilst we sit patiently, we hold some seriously under-priced assets which have all opportunity to generate exemplary returns in ‘normal’ conditions too, truly a ‘Goldilocks’ situation though we must never be complacent. At least we know ‘why’ we are doing what we are doing and we have a handle on ‘valuation’!
For ourselves, adding to that the opportunity presented by discounted Investment Trusts and the expectation for more corporate activity to see discounts reduce or disappear altogether by some corporate action, enables us to expect more odd overall percentage gains for clients from this technical trading situation which is just there for the taking (yet which most investors either ignore, do not understand or are with advisers or platforms which do not use or allow them).
I read an interesting piece on bubbles and trying to consider the flags which may signal one. Aside from a consensus, the AI sector (the tech spike particularly) is manifesting these apparently. I shan’t go into depth as it is always opinion but when a nigh £1billion takeover by a US firm of a UK AI start-up, a people-based firm where there may not be universal confidence in its effectiveness and efficiency to be profitable and ‘perform’ (valuing each staff member at some colossal sum).
Well done to the founder directors and I wish both the takeover well and indeed the future scaling-up but last year the firm turned-over just above £40million and still ended-up with a £4million loss. Maybe if the suitor pays in its over-priced shares it won’t be so bad…
How much do you charge?
That seems an obvious question to ask of a new financial adviser but probably it is the wrong one. Yes our charges are extremely competitive and fair regardless, with some compelling and unique differences and benefits but that is not the point. No, the service provided and the quality, attentiveness, competence and dynamism in the staunchly independent guidance and advice provided, care, etc are crucial to us but that doesn’t mean at ‘any price’ either. The same applies to the investment management – are your advisers simply ones who sell products based on what the past has done or do they have opinions and views about how the future may lie instead?
We were humbled to receive this testimonial from CP who has only been a client since 2022:- ‘I am 81 years of age, M 90 and in all my years I have never come across a company that looks after their clients as well as you do. In fact, it is usually the opposite hence I have been a loner all my life’.
Thank you so much for your really kind comments but how much is the service, trust and such confidence worth to you? If it is simply a headline fee, compared to a cheaper one promoted elsewhere, maybe we are just not for you after all. We know absolutely what we have done for these clients in this very short time and shall look forward to doing more over the coming years.
Interestingly, the AIC announced that share buy-backs of Investment Trusts exceeded £10billion in 2025. Whilst of course there are plenty of other factors involved and things can go in reverse, these programmes help to reduce discounts on Trusts because they increase buying interest – the share price against the underlying asset value.
Part of me says ‘that’s a shame’ as the value for future purchases is less but the reality is that if you had a portfolio of unitised holdings (as most investors out there have – not ours of course), even ignoring their special bonuses from funds closing-down (another sadness very often!), you would not have enjoyed the extra return from the discount narrowing from 15% to 12.5%. In English, this meant that your investments gained an extra 2.94% return in 2025.
So if say your strategy was full of Investment Trusts and not unitised holdings, even if you were paying an annual fee of say 1.5% to a manager who knew how and what to buy of these for you, you still did better than the very cheapest unitised tracker fund or whatever because you gained 1.44% on top and for free. I haven’t even mentioned the potential extra ‘1.5%’ we added on our total funds under management just by holding silver… what was that tiny call worth in fee terms then!
As I have shared on numerous occasions, most investors not with us don’t ‘understand’ these things and secondly, for our fees for managing clients’ assets, we provide so many free and invaluable services on top as well and which we hope are worth vastly more than ever any headline fee anyway. Yes, we anticipate further contractions in discounts too and remember – we can and do buy ‘anything’ as we are not constrained – we buy whatever we think is best for our clients’ specific job, spreading money very widely indeed.
Good news/bad news
For some time, we have been buying nickel as the price was becoming cheaper and cheaper and for various reasons. Yes, holding direct commodities can be considered esoteric but these days, it is ‘easy’ to do so and for the value investor looking for uncorrelated alternatives to shares, for example, they can fit handsomely.
No, of course we don’t go overboard but there have been several very lowly-priced commodities including some ‘softs’. So, why do I mention this? Because Nickel has shot-up by almost a third since its recent low on 16 December, to levels last seen in June 2024. We’re still riding it and can’t complain meantime – expect for the usual ‘I wish I’d had more confidence and that we had more’.
Associated British Foods fell 13% as Primark sales disappointed and food suffered challenges too. Sales are still up but under best hopes – the share price slump seems an over-reaction.
Poor old St James’s Place
A survey of 500 financial advisers and discretionary managers ranked St James’s Place the worst in terms of ‘losing their trust’ in 2025, generically citing ‘underperformance’, ‘high fees/poor value for money’ and ‘poor client/adviser service’. Hmmm.
Orphan clients
We don’t mind as these prospective new clients have been told by their adviser with whom they have been since 2013 that they aren’t wanted anymore. It seems that firm has sold-out to a consolidator but what value that new firm will secure is unsure, especially if clients are being treated accordingly!
They are told that despite being wholly big enough for us (we don’t set rigid limits anyway and try to help anyone we can), they aren’t big enough and the proposed new firm won’t want their existing assets, so they’d all have to be sold regardless of their merits (and the costs). We shall be delighted to welcome them to our fold.
Curiously, they were referred by happy existing clients who are much smaller than them… it shows how it can work – or how it can fail if things aren’t managed properly.
Bubbles
For the gamblers out there who think there are such things as lucky streaks and also those who have found a fantastic confidence in their stock-picking capabilities on the stock markets of the world (or even other assets like residential property etc), beware bubbles.
This is a lovely video which basically shows what happens when bubbles burst.
2022 – Liz Truss
Some very interesting interviews here – certainly more research into what really happened would be good for our Country! It was absolutely clumsy Budget delivery inevitably but I say again, the Economy now would be in a far better place if we had adopted the proposed changes. Too many compromised interests didn’t want her or the changes!
Remember, Gilt yields have been considerably higher since she stood down. https://www.youtube.com/watch?v=7JHRojeLrDY
Correction
Thank you, Mrs MJ for correcting my scientific error in the last eshot. The context of chlorophyll in the eshot was that with the increased ‘greening’ there is more of it, as there is more plant life. Clearly, photosynthesis itself does not make chlorophyll but it is a necessary part of that vital energy production mechanism which plants use.
I am happy to put the record straight though do mention I remember well learning about this rather too many decades ago!
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
