Wealth Management: Quarterly Letter – Navigating challenging investment seas: Foreword
English is a language rich in maritime metaphors. Though we might not even realise it, when we tell someone to pipe down, are left high and dry or shop at a flagship store, we are using terms that originate from seafaring.
We're also quick to reach for images of being on a ship out at sea whenever investment markets are volatile. Commentators talk about battening down the hatches, turbulent waters, of storms ahead.
Over the past 12 months, such figures of speech have been used with increasing frequency. As you will probably know, 2018 was a challenging year. December rounded off the worst year for America's S&P 500 in a decade. And it wasn't the only global stock market to struggle. After a sustained period of market expansion, investors received a stark reminder that the value of investments can fall as well as rise.
In the opening months of 2019 the investment markets have been more forgiving. However, the rest of this year is unlikely to be plain sailing. We are late in the cycle and there is a lot of uncertainty out there, from the ongoing Brexit saga to slowing global economic growth.
Our hard work will continue regardless, however choppy the investment seas become. As you will have heard many times, our focus is on the long term. Our portfolios are built to deliver inflation-plus returns whatever the investment weather.
As we explain in this Quarterly Letter, much like record-breaking round-the-world sailor Dame Ellen MacArthur, we can see the opportunity in stormy waters. Market downturns can provide our portfolio managers with the scope to invest in new positions or top up existing holdings when they are cheaper. By seizing such moments we aim to increase the intrinsic, long- term value of your portfolio.
CEO, UK Wealth Management
In this Quarterly Letter:
Download the full Quarterly Letter in PDF format (467 KB)