Equities In Turmoil

: Published on Monday, 08 August 2011

Once again it seems the equity markets are on a Rollercoaster ride due to the nervousness over bank borrowing but what does this mean for client savings?

In the UK we tend to use the FTSE 100 as the measure for all investments other than cash. This UK centric approach is understandable but far too simplistic nevertheless the FTSE 100 has in effect been static now for 14 years (it was at 5,244 in September 1997) and if you took account of inflation the FTSE 100 hasn't risen in real terms since around June 1995.

There is no getting away from the fact that every investor invested in the FTSE 100 is much worse off now than they have been for decades. In our view the only way to minimise losses and stand any chance of decent gains is to choose low cost collective investments from a wide range of asset classes and to look for income as much as capital growth. Right now many of our investors rely on the income from their portfolios, this income doesn't gyrate with the capital value (although clearly income can go down as well as up) and for many the income from assets (ie property, National Savings, fixed interest UK and international equities) is much higher than that available from cash.

Looking ahead, equity investment looks very attractive however until the western world works out how to live within it's means it seems likely that markets will remain volatile so diversify, diversify, diversify! remains our key investment policy.

Here you will find our latest client bulletins and any other noteworthy news we can bring you