Paul Scott, Managing Director of Scott Financial.
Everyone in the UK believes they have an individual portfolio; however it is alarming just how similar each portfolio turns out to be. It's also curious that these portfolios remain so dominated by the UK FTSE 100 index. In a post BREXIT UK, you might agree that a little more global spread would be prudent. The question is not how many eggs are in your basket, but how many baskets full of eggs do you have?
There is a world of investment outside of European and North American stocks and shares; the issue is how do we access this market safely? Example China, India, Brazil, Russia. It is an unfortunate fact that around 80% of fund managers, fail to outperform their tracker index (average). Active fund managers are expensive, so why pay high fees for under-performance? This issue is even more prominent for low risk clients.
For the more adventurous clients it is clear that the best active managers can still add real value. For these clients, our task is to focus on the selection of consistent "out-performers". Clearly a combination of passive/trackers and these high reputation out-performers could give a healthy blend of lower charges and increased performance. This is our current strategy.
We provide risk rated portfolios containing a blend of around 40 "best of breed" Active and Index funds. These professionally managed Portfolios are automatically reviewed every 3 months. Risk rated from 1 to 10, they are targeted to produce the highest return, based on the level of risk that is acceptable to the client.
I must confess that I subscribe to "contrarianism". If all parties are in absolute agreement, its almost certain to be wrong. With investments it can pay to be unfashionable. Over the long term, any single-solution is usually wrong. A blend of many assets provides the smoothest and most secure growth result; cash, gilts, bonds, property, global stocks & shares.
"Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” - Warren Buffett, Jan. 09, 2007.
The value of investments can fall as well as rise, you might get back less than you invested.