It appeared to be a quiet week last week in terms of interesting articles. However, there were a couple that popped up, just as we were sliding out of the office and in to the weekend, catching our attention, giving rise to a chuckle and ultimately making us ask why, just why?

As you might expect with the squeeze on fees the pressure is beginning to build on fund managers as discretionary managers increase their oversight on behalf of advisers who are watching carefully on behalf of their clients.

It makes you wonder if this article (look for photo no. 6) is not closer to true than first intended. The first article suggests that the discretionary manager is preparing to “crack” the whip and not tolerate poor performance on the part of the investment manager.

At the retail end of the spectrum the message appears quite different in this article originating from your money quoting AJ Bell about the futility of “timing” the market or chasing gains. Wheeling out statistics to suggest that missing the “best” 10 days of the market will cripple a portfolio may be true. However, we have seen exactly the same argument presented for avoiding the worst 10 days in the market.

This would suggest that an effective strategy lies somewhere in between financial professionals not tolerating underperformance, yet suggesting for the retail investor that it is an accepted fact of life.

We took the time to re-visit an earlier blog with a suggestion that an effective investor needs to think about their approach to markets. Somebody in the chain from client to adviser through the DFM and on to specialist investment managers needs to be tactical.

At the moment it looks like the professionals are encouraging tactical asset allocation as long as the client leaves their money in the same place. Can this be right?

All we know is that there is a body of evidence to suggest that there are trends to follow, benefiting your portfolio and at the same time taking sensible steps to preserve capital when the signs are poor, which can make a significant difference for long term portfolio performance.

Keith Reid
Keith Reid
Keith’s training as an accountant and auditor has emphasized the importance of evidence in all good decision making process. The ability to monitor management processes effectively is a key to making the most of business opportunities. Both Keith and Gerry believe that this priority for capital preservation is the common principle that sets the framework for any sound investment strategy or business model.