Investment Newsletter March 2017
The long and winding road We have had many discussions with clients recently about their investment “journey”.
Mike Deverell Investment Manager
Our investment philosophy is to focus not just on where we end up, but how we get there. We know that equities tend to offer the highest returns of any of the main asset classes over the very long term. If we were just concerned about the final destination and had a long enough time horizon, then a 100% equity portfolio would be the way to go. In fact, this often would be our recommendation for many of our younger clients who have 25+ years to retirement, especially those making regular payments into their pensions. However, most of our clients don’t have the risk tolerance for such a bumpy journey. Having worked hard all their lives to build up their portfolios most
clients would find it hard to stomach the 20%, 30% or sometimes even 50%+ losses that stockmarkets can suffer from time to time. With enough time markets eventually recover such losses but many of our clients require money out of portfolios regularly and can’t afford to wait for a recovery. Our aim therefore is to not go for the best possible return but the return that is required to meet our clients’ financial goals with as comfortable a journey as possible. During recent discussions with a client we noted that over the 12 months to 22 February 2017 (his review date) the adventurous portfolio had returned 16.8% (after all fees) whilst the FTSE 100 was up 25.7% over the same period.
Equilibrium Asset Management LLP (a limited liability partnership) is authorised and regulated by the Financial Conduct Authority. Equilibrium Asset Management is entered on the Financial Services Register under reference 452261. The FCA regulates advice which we provide on investment and insurance business; however it does not regulate advice which we provide purely in respect of taxation matters. Copyright Equilibrium Asset Management LLP. Not to be reproduced without permission.