Hello
Happy New Year from Fairey Associates.
I don’t write articles terribly often but I wanted to write with our view on the world and what it means for investment at the start of 2021.
Many private client investors tend to dwell on the short term and the focus is very often on negative news. Of course it is human nature to do this. We feel pain and loss far more acutely than pleasure and what happens now is always more keenly important than what might happen later. Investing however, should almost be the antithesis of this. We invest for the future with a time horizon of at least 5 - 10 years but very often for the rest of one’s life, and for wealthier clients the view goes beyond into the next generation.
It’s incredible to think that the credit crisis happened almost 13 years ago and since this time, while exchequers still labour under the fall out of this, we have seen markets react to US politics, trade wars, social and political unrest and the current Covid crisis.
Trying to trade these events or second guess what markets might do in the short term is, in my view, an almost futile endeavour. So what do you pay us for? You pay us to remain dispassionate. To keep a firm and objective hand on things. We maintain a disciplined approach to going underweight or overweight in certain sub asset class sectors. We don’t make bold, rash, big trade decisions because the market is bound to prove us wrong far more often than we get it right. You also pay us to know our craft and to provide a reliant and efficient service in all of the other areas of tax planning, transferring money in and out, administration, telling you what you don’t know or haven’t thought of, to not make mistakes etc.
So what about Brexit, Covid and the rest of 2021? Our central belief with regard to Brexit was that a deal would be done. Neither side of the water wanted the cost and social/ political risk of no deal and sure enough a deal has been done. There will continue to be lots of negative press of course. Bad news is the currency of the press. There will however be winners too. But do we care as investors in globally diversified portfolios? The answer is only up to a point. Covid of course is a global crisis and whilst much is made of which nation is doing better than another, this is all dependant on timing. Pretty much all nations are facing the same problems and at points may have handled certain aspects slightly better or worse than others. The outlook and markets will be driven this year predominantly by Covid, its mutations and the success of vaccine role out, as well as fiscal and monetary response by central banks and governments. We can’t foresee what is going to happen but of course the hope now is that we return to normal life. Despite timeframes given by the politicians I think it prudent to think normal life might start around 2022... Despite this, our central view is that equity markets will probably continue to rise in 2021. They will however, remain unpredictably volatile and endeavouring to trade them is futile. We invest and keep our investment eyes on the future while living and enjoying the here and now as best we can. We must rest assured that Covid will eventually be consigned to the history books and humanity will eventually be stronger and wiser as a result!
I wish you all the very best for 2021. Please take care of yourselves and keep safe. Oh and for those that haven’t looked at their portfolio performance with us please see performance charts under for our hybrid, passive and ethical portfolios over the last 12 months. Of course for specific performance do log in to your wrap account or contact your adviser. It is not, I am pleased to say, all doom and gloom!
Best
Ed Fairey BSc (ECON) Hons, APFS
Chartered Financial Planner
Managing Director
Telephone: 0345 319 0005
Mobile: 07780 685 634
Fax: 020 7160 5265
Please contact us if you have any queries about the introduction of Standard Life’s new online portal.
Happy New Year from Fairey Associates.
I don’t write articles terribly often but I wanted to write with our view on the world and what it means for investment at the start of 2021.
Many private client investors tend to dwell on the short term and the focus is very often on negative news. Of course it is human nature to do this. We feel pain and loss far more acutely than pleasure and what happens now is always more keenly important than what might happen later. Investing however, should almost be the antithesis of this. We invest for the future with a time horizon of at least 5 - 10 years but very often for the rest of one’s life, and for wealthier clients the view goes beyond into the next generation.
It’s incredible to think that the credit crisis happened almost 13 years ago and since this time, while exchequers still labour under the fall out of this, we have seen markets react to US politics, trade wars, social and political unrest and the current Covid crisis.
Trying to trade these events or second guess what markets might do in the short term is, in my view, an almost futile endeavour. So what do you pay us for? You pay us to remain dispassionate. To keep a firm and objective hand on things. We maintain a disciplined approach to going underweight or overweight in certain sub asset class sectors. We don’t make bold, rash, big trade decisions because the market is bound to prove us wrong far more often than we get it right. You also pay us to know our craft and to provide a reliant and efficient service in all of the other areas of tax planning, transferring money in and out, administration, telling you what you don’t know or haven’t thought of, to not make mistakes etc.
So what about Brexit, Covid and the rest of 2021? Our central belief with regard to Brexit was that a deal would be done. Neither side of the water wanted the cost and social/ political risk of no deal and sure enough a deal has been done. There will continue to be lots of negative press of course. Bad news is the currency of the press. There will however be winners too. But do we care as investors in globally diversified portfolios? The answer is only up to a point. Covid of course is a global crisis and whilst much is made of which nation is doing better than another, this is all dependant on timing. Pretty much all nations are facing the same problems and at points may have handled certain aspects slightly better or worse than others. The outlook and markets will be driven this year predominantly by Covid, its mutations and the success of vaccine role out, as well as fiscal and monetary response by central banks and governments. We can’t foresee what is going to happen but of course the hope now is that we return to normal life. Despite timeframes given by the politicians I think it prudent to think normal life might start around 2022... Despite this, our central view is that equity markets will probably continue to rise in 2021. They will however, remain unpredictably volatile and endeavouring to trade them is futile. We invest and keep our investment eyes on the future while living and enjoying the here and now as best we can. We must rest assured that Covid will eventually be consigned to the history books and humanity will eventually be stronger and wiser as a result!
I wish you all the very best for 2021. Please take care of yourselves and keep safe. Oh and for those that haven’t looked at their portfolio performance with us please see performance charts under for our hybrid, passive and ethical portfolios over the last 12 months. Of course for specific performance do log in to your wrap account or contact your adviser. It is not, I am pleased to say, all doom and gloom!
Best
Ed Fairey BSc (ECON) Hons, APFS
Chartered Financial Planner
Managing Director
Telephone: 0345 319 0005
Mobile: 07780 685 634
Fax: 020 7160 5265
Please contact us if you have any queries about the introduction of Standard Life’s new online portal.
- The value of an investment and the income from it could go down as well as up.
- All investing is subject to risk, including the possible loss of the money you invest.
- Past performance is not a reliable indicator of future results.
- Diversification does not ensure a profit or protect against a loss.
- Please remember that all investments involve some risk. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
- Tax and Estate Planning Services are not regulated by the Financial Conduct Authority.
- This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice as at 6th January 2021. You are recommended to seek competent professional advice before taking any action.
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