I don’t mean the next wave to hit the side of my Colleague Martyn’s ocean-going rowboat – part of his charitable challenge to complete the Talisker Whisky race across the Atlantic. https://www.atlanticsolo.co.uk
More precisely I mean the next wave of market impacting trauma. Over the past 3.5 years of President Trumps reign the various battles he has had with China have knocked markets for 6, more recently Covid 19 has put pretty much the whole world into lockdown. More localised to the UK and Europe there’s the discussions over Brexit, the new deal and the general boredom of most people now on the whole subject.
Poor investors though are getting metaphorically rocked from side to side after one big wave of antagonism - something the markets never like.
Having moved back towards the high of last year all the major indices now wallow in a state of apathy it seems. Markets seemingly not knowing whether to stick or twist so paddling around at seemingly cheap values.
That’s great for longer term investing assuming there are funds free to invest. But as many have already suffered as reduction in fund values, with some funds being seriously impacted and suspended it makes it ever more difficult.
So what are investors and funds doing?
We hear two different angles.
1. For those in funds they are waiting for the moment they can spot a good investment, be that a low share price or an asset backed opportunity with only apparent upside,
2. Holding cash in the hope it miraculously increases in value – but at least doesn’t diminish beyond real time.
Facing the waves of investment challenges?
Let’s have a look at both of the those approaches.
Starting in reverse order. It’s hard to argue keeping cash is important. It provides both security and flexibility, both very positive upsides. The flip side, in an economy such as that we see across most of the western world, is that with interest rates at c. 0.5% and Inflation at 2% the value of you capital is actually reducing in real terms. Follow that path for 10 years and your capital is worth almost 15% less than it is today in real terms.
The first point is more tricky. Our own experience currently is that our clients and investors are looking for fixed income products. Ideally those linked to a secure asset that has a ready and reasonable market wiht deonstrsatable exit routes, such Berkeley House Capitals, Yacht Bond.
These types of assets mean there’s a steady flow of income over and above inflation, enabling either funds to live from or appreciation of capital. Bespoke solutions that may include security over the particular asset further benefit the value of this type of investment, and whilst no investment should ever be considered without risk these forms typically reduce it beyond most capital markets.
Clearly the risk profile changes with each category and that makes the question of protection even more relevant, particularly when we have seen in the press very high-profile investment managers close their funds losing investors’ money. It seems this again points to the benefits of utilising the services of boutique regulated alternative asset managers, effectively providing increased assurance that investments, whilst not removing all the risk, are managed correctly.
If you are a Wealth Manager, IFA, Family Office or Finance Professional and would like to know more about our investment products and/or services, send us and email to arrange a convenient time to discuss.
If you would like to discuss any aspect of this note please feel free to email: charlotte@berkeleyhousecapital.co.uk and one of the team will be very happy to arrange call with you.
www.berkeleyhousecapital.co.uk
12 Hay Hill, Mayfair,
London. W1J 8NR
United Kingdom
+44 (0) 207 863 7507
1. Berkeley House Capital is an Appointed Representative of Alternative Asset Management Ltd which is authorised and regulated by the Financial Conduct Authority (No. 450404). Not all of our activities are regulated by the FCA, further details are available from us on request.
Disclaimer
This email is intended solely for finance professionals, if you have received this email in error please inform us.
Neither this email nor any information contained within it constitutes investment advice or an offer or solicitation to sell in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. The material contained within is purely for information purposes and its accuracy cannot be guaranteed. Investments may go up or down in value and you may lose some or all of the amount invested. Past performance is not necessarily a guide for the future. Returns from investments are at risk in the event of any of the institutions who provide securities for these products default on their financial obligations. Any decision to invest should be based on the information contained in the relevant term sheet or prospectus (and any supplements there to) of the relevant product which includes information on certain risks associated with an investment.Under the General Data Protection Regulation (GDPR) (EU) 2016/679, we have a legal duty to protect any information we collect from you. Information contained in this email and any attachments may be privileged or confidential and intended for the exclusive use of the original recipient. If you have received this email by mistake, please advise the sender immediately and delete the email, including emptying your deleted email box.