I don’t mind confessing that I won’t be sad to see the back of 2015. With the market still nearly 10% off its summer highs at the time of writing, volatility has been the main feature of the year. We’re now nearly 8% up from the August low following China’s devaluation, which sums up the huge swings we’ve seen in the market during the last 12 months.
Despite being tough, it’s been one of these years where experience pays off. Our investment managers haven’t panicked – they’ve stuck to their guns, backed by the high quality research provided by our in-house team, all of whom contribute much of the investment commentary in these quarterly newsletters. We’ve also been heartened by the expectations of our clients – where the general feeling seems to be that you’ve seen it all before – and therefore there’s no need to panic.
We do of course use these set-backs in the market to make adjustments to a portfolio, as and when necessary, so we are by no means sitting back waiting for the market to recover. In fact there’s no opportunity to relax at present, with so much uncertainty hanging over the market. From the potential constitutional crises, both here and in Europe - covered in the editorials by Geordie Kidston and Bruce Anderson respectively, to the seemingly eternal wait for an interest rate rise by the Federal Reserve, which will naturally have implications on any bond exposure, as discussed by our Head of Fixed Income Research, John Royden, much needs to be watched.
The commentary, on page 28, is simply a snapshot of the output from the last committee meeting which is designed to provide our investment managers with a guidance on individual asset classes, should they require it. I hope you find this of interest, alongside our usual investment commentary, which also features some insight from a seasoned investor in European markets, Richard Pease, who describes how a stock picking approach can uncover hidden gems, despite a sluggish economic environment. We have introduced a new feature for this edition of Prospects. With so much going on in the world, we felt it was pertinent to provide our Asset Allocation Committee’s views of various asset classes.
As a member of the Royal Academy, we are looking forward to their exhibition, “Painting the Modern Garden” which starts in January 2016 and features paintings from Monet to Matisse. Ann Dumas, the curator of the exhibition, describes for us on page 22 Monet’s passion for gardening and how this resulted in the development of his painting.
We have attempted to keep Prospects an investment focused newsletter with a variety of topics covered, interspersed with articles which we feel will be of interest to our clients. I hope you enjoy this edition and do continue to send us your feedback.
Published by JM Finn & Co on 11th March 2016
Image credits: Shutterstock images
Jon Berkeley/Debut Art
Jon Berkeley is a renowned illustrator who regularly contributes to publications such as The Economist.