You have to laugh. At least, as an investor, you have to. A full year of Brexit and Trump which, in the minds of many economists and intelligentsia, should have trashed the Western economy, and what do the markets do? They thrive like never before. We have the UK FTSE 250 up by 14% and the US by 20%. I wonder what would have happened if we’d voted for Hillary and Remain?
Still, the dogs will have their day at some point, and it’s all bound to come tumbling down in a market “correction”. Reading the papers this week, most City commentators – no doubt sipping their second Bolly of the morning – don’t see this as happening in 2018. All systems are go, the world is looking good, Big Tech has more growth in there yet and China, well, who really cares? They weren’t great in 2017 and look what we did!
All this makes me scratch my head in frustration. I like to think that at least I know that I know nothing when it comes to investing, so I’ll stick to my largely passive, Index based strategy. But which Index? Should I stay in the UK? (I’m actually out of the US, because I sold up in anticipation of Trumpian havoc, underlining the fact that I know nothing.) Should I rebalance into Emerging Markets? China? The Pacific Rim? Latin America? Am I too late for Japan?
At the moment, I’m spread across many of these markets, but not in a big way. These days, almost the majority of my investments sit in dividend paying international funds such as the Fidelity Global Dividend and the L&G International Index. My intention is to stick with them and not tinker around, but is that a wise move?
One of the things that surprised me when I reviewed my allocations was that 15% of my portfolio is in an Investec Global Gold fund, which I started back in mid 2015. I must have been twitchy as an investor at that time too, hedging my shares against the lure of the precious metal. Let’s face it though, as an investor I’m ALWAYS twitchy, always thinking that every silver lining has a cloud. At the end of a year where my investing and pension portfolios are both returning more than 15% growth, my overall thought seems to be “We’re doomed!” The party has to end at some point and how should I best guard against a crushing hangover?
Another irritation from the year is the investing equivalent of penis envy. Is my growth as big as the next bloke’s? Of the financial commentators I do read, I like the straightforward and easy to understand style of Ian Cowie in The Sunday Times. He has a portfolio of single shares that he calls his “Forever Fund” and, seemingly, it’s up 24% this year. That knocks my performance – restricted by conservative pitches into gold and bloody bonds – into a cocked hat. While I know I’m not comparing apples with apples, it doesn’t seem to help. He’s done better than me and, if my portfolio had grown by 24% I’d have made…..oh, I can’t even bare to calculate it.
So, as I say, in the face of this imminent financial catastrophe that, in my head, is coming, I have to laugh. Sometimes I feel I should be a lot more irrational, convert everything into cash and stuff it under a digital mattress. Unfortunately the suspicion that one day I will be uncovered as Unlucky Alf would then mean that inflation would take off to 10% and I’d be ruined that way. There doesn’t seem to be much alternative than to keep reading the tea leaves as best I can, taking an interest in the financial pages (and blogs of course) and tell myself that, whatever happens, “I’m in it for the long term”. I know, “in the long term” that we’re all dead, but I think I’m happy with that because, coincidentally, that will be the day it seems I will stop worrying about my financial performance.