Dedication’s what you need…..

“To succeed jump as quickly at opportunities as you do conclusions” Benjamin Franklin

 Happy New Year everyone…..so 2016 has come to an end and we head into 2017. It has been a while since we have had a year with so much to talk about. Whether it be the people’s choices going against “expectations” (as I mention time and time again, predicting is a futile exercise), most notably Brexit and the Trump victory.  Or with  the loss of so many people who really made a difference to our lives and the world. I am sure you all have your own thoughts on these. As a golf and boxing fan, Arnold Palmer and Muhammed Ali were most poignant  personally.

But we are all still here, no doubt  looking forward to 2017 but probably feeling a little like we did 12 months ago on on 1 January 2016. We are all one year older so therefore presumably one year closer to events which require you to be in the right financial position:
  • Retirement ?
  • Marriage?
  •  Having children?
  • Children starting school / university ?
  •  Business and  investment opportunities ?
  • Year off sailing around the world..?
The list can go on and on…… so lets hope you got what you deserved financially out of 2016. Any of you who grew up in Britain  or perhaps had children already in the 1980s , will remember Roy Castle and Record Breakers. 2016 was a record breaking year for the markets and if you were not beneficiary of these all time highs, perhaps you need to reconsider what you are invested in. Lets take a look at the  data 

                                                                   Dec                   Qtr                 2016
FTSE                                                        +5.3%               +3.5%            +14.4%
Dow Jones                                               +3.3%                 +7.9%           +13.4%
Nasdaq                                                     +1.1%                +1.3%             +7.5%
Dax                                                           +7.9%               +9.2%             +6.9%
Nikkei                                                        +3.3%                +16.2%            +0.4%
Shanghai                                                  -4.5%                 +3.2%            -12.3%

All major currencies fell for the year against the USD as follows:

GBP         20.0%                                                                                                      
EUR         4.1%                                                            
JPY           2.7%                                                    
CNY          7.5%                                             
AUD          1.2%  

So what does this actually tell us. Well firstly, the lack of red means we should all be a lot better off with our portfolios / pensions. Despite a minimal interest rate rise in the US, we are still years away from earning any decent levels of interest in the bank so I suggest taking a 13.4% return on the Dow or an 7.5% return on the Nasdaq would be welcome.

Even the Japanese and Chinese markets which stuttered finished 28% and 18% higher than their 12 month low

And this is just passive investing, start using good managers out there and you should see these returns improve. Those of you who work with me probably own Fundsmith and Henderson Technology fund…..27.2% and 26.5% respectively …not a bad return on your investment.

The bundle of four I always refer to again outperformed the Nasdaq, 8.7% versus 7.5%. Its not about bragging for being correct in hindsight, just ask yourself …this time next year will there be more or less people using Facebook, buying Microsoft cloud storage, advertising on Google and subscribing to Amazon….I think you know the answer

Yes ride the market wave, take some profits but remember its the companies that count and owning good ones is the key to making money

Of course there are issues such as a falling pound which need to be considered….owning assets in three or four major currencies is a way to hedge this, but of course if you live in UK, have mortgage in UK etc you are still better off as your stocks have flown. Yes that trip to Spain or Florida may have cost more,in the future think of owning some USD / EUR to prevent being a victim to these fluctuating currency markets..

To conclude of course no one can be right all the time. If you didn’t make money in 2016 , you most definitely need a change. Working with people who are knowledgable and dedicated helps…..as Roy would say “Dedication’s what you need……if you want to be a record breaker…..”

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