Category: Investment

Don’t put all your eggs in one basket

Posted on | by Arthur Beverly | Leave a Comment on Don’t put all your eggs in one basket

By and large, most investors are more concerned about losing money rather than making money.  They don’t want to see the value of their investments fall.  Its a common trait in most people.

And therein lies the dilemma for Advisers.  How to protect the Client’s savings while at the same time get a good return?

The answer is Diversification of assets.  Diversify the investments over many funds, many sectors, and many asset classes.

Studies have shown that a diversified portfolio doesn’t always sit at the top of returns but there again it is also very seldom at the bottom of the heap.

A diversified portfolio designed to meet each investors specific needs in line with their risk profile will help clients avoid the downside risk of a “non-diversified” portfolio.

The Healthy Optimist

Posted on | by Arthur Beverly | Leave a Comment on The Healthy Optimist

To be successful, investors need an attitude of healthy optimism.

This idea is based on simple logic which is backed by evidence. Securities have delivered positive returns in the past and it’s reasonable to expect that they will continue to post positive returns in the future. However, it is not reasonable to expect returns to be positive every day. We should expect good days and bad days, with the average being good.

And because we don’t know which days will be good or bad, we should act as though all days will be good because we can’t predict them and don’t want to miss them when they occur.

This attitude is helpful both when markets are high, because it reminds us that they can go higher, and equally when markets have fallen, for exactly the same reason.

Using Multi-Asset Funds in Client Portfolios

Posted on | by Arthur Beverly | Leave a Comment on Using Multi-Asset Funds in Client Portfolios

If the recent volatility in stockmarkets has demonstrated anything, it is that holding a diversified portfolio of investments rather than relying on any one asset class for returns is usually a wise approach.   So says the Investment Association.

It is no wonder the popularity of multi-asset funds is soaring, they say, with trade body, the Investment Association, reporting its Mixed Asset sectors have been taking in significant inflows.

We’ve been following this formula for many years now and we are pleased that our views are receiving the approval of the IA.

And one other thing to remember, particularly in times of volatility;  “It’s not the timing of the market, it’s the time in the market!“

INVESTMENTS! – Active versus Passive or Active and Passive.

Posted on | by JD | Leave a Comment on INVESTMENTS! – Active versus Passive or Active and Passive.

Some Advisers have debated long and hard whether Active or Passive Investing is better in the long term.

In more recent years, the passive advocates’ voices have been heard loud and clear but this of course misses the point that there remains a number of hugely talented fund managers who have managed to beat the market, some by a significant margin, over time. The key, of course, is being able to find them.

I am fairly agnostic in this debate and believe that it is important to give clients the choice of both active and passive solutions while at the same time sticking to my mantra of Diversify, Diversify, Diversify, and matching whatever portfolio is best for the Client in terms of his or her Risk Profile at a reasonable cost.

I try to give my clients a balanced view on both sides of the argument and allow them to make an informed decision on choosing one strategy against the other.

There is of course a third way and that is blending the two strategies to give a good mix and using the investment house’s expertise in choose which funds should be actively managed and which should be passively managed. That choice is not set in tablets of stone and the blend is open to movement between both strategies depending on circumstances.

Of course like all investments, past performance is not indicative of future performance and the value of investments may go down as well as up. Also, the income generated by investments is not guaranteed and may fluctuate. Lastly you should be aware that you may receive back less than the amount that you invested.

If you would like more information, on this subject ( or any other, for that matter ), please feel free to contact us. A no obligation meeting is available should you wish. And I’ll buy the coffee!

 

 

FCA ramps up warnings over online investment scams

Posted on | by Arthur Beverly | Leave a Comment on FCA ramps up warnings over online investment scams

The FCA is warning the public to be vigilant protecting themselves from online investment fraud, with figures showing investors lost an approximate daily amount of £87,410 to binary options scams last year.  Latest data from the FCA’s Scam Smart campaign shows the kind of investor being targeted by online investment scams is changing.  The regulator says those under 25 were six times (13 per cent) more likely to trust an online investment offer made via social media than people aged above 55.

The data shows more than one in five (23 per cent) survey respondents say online customer testimonies and reviews increase their trust in an investment company.  A further one in 10 (11 per cent) say they wouldn’t conduct any of the listed checks at all, such as checking whether the firm was regulated by the FCA or registered with Companies House, before parting with their money.

FCA has issued a warning on fake regulator legitimising scam and FCA director of enforcement Mark Steward says: “As people have become more sceptical of investment-related cold calls and consumer habits have changed, we have seen investment fraud moving online and to social media.”  He adds: “While their websites and profiles appear to be professional, they are all too often run by fraudsters who fix prices and pay-outs.”

Tom McPhail, of a well known investment house, says investors need to be savvy on recognising unregulated firms.  He says: “The whole investment community including legitimate firms, the regulator and investors themselves must remain alert to the risk of fraudsters trying to separate ordinary people from their hard-earned cash.”

On 3 January, binary options became a regulated investment product, which means all firms trading in these products need to be FCA authorised.  The regulator has since published a list of 94 firms without FCA authorisation that it understands to be offering binary options trading to UK consumers

 

Recent Market Volatility

Posted on | by Arthur Beverly | Leave a Comment on Recent Market Volatility

Well, have the Markets settled down again?  I honestly don’t know.  In 30 years of business, the markets have never really settled down in my opinion.  “Settled down” to me means a straight line in an upward trend on an ongoing basis.  Bbut markets don’t behave like that.  They are constantly moving up and down, but hopefully with a general trend upwards over the longer term. These up and down movements are called market volatility.

While market volatility can be nerve-racking for investors, reacting emotionally and changing long-term investment strategies in response to short-term declines could prove more harmful than helpful. By adhering to a well-thought-out investment plan, ideally agreed upon in advance of periods of volatility, investors may be better able to remain calm during periods of short-term uncertainty.

Investments involve risks. The investment return and principal value of an investment can (will!) fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value.  Over the longer term, that redemption is hopefully more rather than less.

Many Investors look at how Funds have performed in the past.  Do, however, be aware that past performance is not a guarantee of future results.  And you should also be aware that there is no guarantee that strategies will be successful.