Dear Clients,
Happy New Year. We hope your Christmas and New Year were good fun.
Please click here to read an update from Albion on asset class performance over the last 12 months.
I write this looking at what seems to be an empty London (it is a Friday) following rotten weather. It seems the world in 2024 is uncertain and scary. The wars in the Middle East and Europe are truly horrific. While it feels like everything is different from the familiar, I think it was ever thus. There is a real danger that we reassure ourselves by reacting to current events and investing in a way that takes these new concerns into account. But time and time again, we see that investing in what is fashionable today (Bitcoin, Nvidia, or pick your own) is a lousy investment strategy.
When we take on new clients, we see conventional reactive retail investment strategies failing. We see money on deposit losing to inflation. And still we see structured products (one recent one was advertised as having no charges or fees) destroying wealth. The world’s financial service regulators do not seem to be overly concerned about these products or advice. Instead, we are asked to provide ever more certified copies of trust deeds and gas bills, because that will drive down financial crime.
What works in the medium and long term is what has worked in the medium and long term for over a hundred years. Highly diversified and disciplined portfolios that are fundamentally buy and hold. Our portfolios have changed over the years and they will continue to change over the years. But this is a result of rigorous academic research and is evolution not revolution. We remain both open to new ideas and sceptical of new ideas.
The Albion compiled information is reassuring this year, much more than last year, but there will always be investment challenges. While we are experts in investments and proud of our portfolios, we know it is changes in circumstances and changes in legislation that present some of the biggest wealth management challenges. A change in pensions legislation, an unexpected marriage or another grandchild are all times when we are called upon to advise. Circumstances and legislation are constantly changing.
We look forward to working with you in 2024 and hope you find the attached data interesting.
I hope we all have a healthy, peaceful and prosperous 2024.
Ben