Will ‘change’ really be for the better?
WE are independent investment advisers and managers. It is interesting to consider how politics are similar to investments.
Over the years, we find one of the most costly mistakes made by investors is to lose patience (some of that is because they don’t have a relationship with a trusted and knowledgeable adviser to be able to chat things over with, so the ‘red button’ for a ‘sale’ is too easily accessible). For us, active management is constant oversight, not constant change.
It’s hard – if purely superstitiously (such as not facing a loss), it is wrong not dumping a bad performer when that is what you should do based on the prognosis (either a poor future view or that the money can work harder somewhere else).
However, more often than not, the masses do ‘just sell’ something which in their eyes has fallen or ‘under-performed’ something else (either an individual investment or even a portfolio or a manager/style).
That is often where we find there is fantastic value lurking, where the good, bad and ugly are all embroiled together. Some of our best investments over the last few years have been the most unloved, which became the too-loved!
And yes, there is no special recipe – and we may have seen an asset drop significantly in price (and some may die altogether) but we have chased them all the way to the depths of unlovedness (again, not from superstition but where the fundamentals, to us, were compellingly attractive).
However, we protect the downside by having nothing presently over 2% of all client assets.
So where does the political link come? Well, this election (all elections?!) is all about ‘change’ and a sense of ‘fedupness with one’s lot’ is being pushed as a giant reason for ‘change’ but is that really better?
I’m not saying either but voting for change just because it is different is irrational and unwise (just as selling an investment or changing a manager from frustration is), however rosily such ‘change’ is being dressed-up and all the main parties are doing their best to push their ‘change’ agendas going forwards.
Will this be an election when the pledges of change win, or where it is again a case of ‘better the devil you do know, than the one you don’t’?
I think too that as with many elections, a party doesn’t win – the others just lose them. I hope that whatever the outcome, we don’t have serious regrets that there are many things we shouldn’t have changed at all and that the new lot is far worse than the old. Please think carefully before you place your cross!
Philip J Milton Barnstaple, Devon