Morning all,

I thought I would share with you some attachments that have come through from BT on how the market performs over time and the bull and bear chart that gives you an idea on how different the upside of the markets is versus the downside. Very interesting in chart form as it really does show that downtime is not only very short, but the negatives are so small compared to the length and returns of the good times.

I have had some interesting conversations of recent times with people who forget how much they have earned on their portfolios versus the small losses they get when the markets do turn. As I have spoken about early this year, we were expecting a loss of about 15% this year as the market ran so hard last year after the Pandemic slowed down. If you are invested like me, you would have had a 22% loss on your portfolio, but I know that my fund will return far greater amounts when the market turn upward like it has done every other time in history. However, having said that not everyone is high risk like me and hence when we invest your money, we do so in your risk profile, so you don’t have major stress attacks when the market does fall as it does so every 5 to 6 years on average.

We have had a major research session over the last month and looked at every portfolio and every fund managed that we could to compare all the different investment scenarios and portfolios so that we could assure ourselves that our research and investment managers are the best and or if not at least the second over a long period of time. We also went through the various portfolios to make sure that there was no overlapping of investment funds and or global areas to give the portfolio the correct diversification. The pleasing thing is that we did correct certain portfolios and reweighted others as we do on an ongoing basis to make sure we are relevant in the investment world.

The most important thing with investing that is basically investing 101 is time in the market. Obviously having good strong steady traders working for you under the fund manager is a close second but time in the market gives you the compounding effect that increases your funds quicker the longer you hold your positions. Good fund managers give you the bigger upside to the time in the market over the long term and when times like now occur you can ride through these and expect a better upswing once the market recovers and goes forward. 

This is just a short email to cover off on what is happening now in the market. As we all know inflation is the hot topic with interest rate moving to slow down the rising costs within the economy. I must say this has been a topic by many economists since early 2021 when most thought it would be a great idea to move on interest rates, so we don’t have an overreaction like we are having now. Some very wise economists were advising governments to increase rates slowly to make a softer landing and not let inflation out of the bottle, but I guess politics got in the way. We now have the treasury working hard to contain the inflation problem and the press are doing a great job of freaking everyone out with bold headlines predicting the end of financial life as we know it. Over reactions really are a waste of time as the period of inflation in question will pass and rates will ease and pause. I guess having very low interest rates lured a lot of people into borrowing too much which is problematic from a cashflow perspective as budgets are now going to be problematic.

Talking about budget the key to financial strength is knowing what you spend your money on. Yes, that old saying by Socrates “The beginning of wisdom is know thyself”. So just to annoy you I have included a budget planner to help your stress levels increase 😊 you can thank me later.

 Until next time happy investing and take care

 Regards

Allan