17/09/15‘But that lane is moving faster…..’
See the left lane in this image? what happens if you jumped into it..? would you get there quicker?
So, last week I found myself travelling to Billericay, Essex. I was going to an Investment Forum, where all the great and the good in the world of Investment Fund Management were about to unveil their new investment strategies.
So I set out at 6am as my journey took me east along the A14, then south on the M11 and then I joined the ‘road to nowhere’ (Chris Rhea’s description of the M25) and finally, a couple of A and B roads. So as you can imagine, I got caught in a few jams and whilst sitting in ‘neutral’ a blog arose from the ashes….
People behind me started to swing out from behind me dropping into nearside or outside lanes, as traffic appeared to move quicker either side me. No indicators appeared to be working, which was amazing considering most of those moving were new cars (at this point, I shall refrain from naming the makes of vehicles, but we all know what make must clearly offer indicators as optional extras!) Torvill and Dean had nothing on the pirouettes being performed as cars swayed in and out of lanes, trying to outmanoeuvre the next driver and get ahead of the game. At this point, I confess to joining in, but taking a more sedentary passage and using Mirror, Signal, Manoeuvre, as I was taught.
By the time the traffic flowed, those that sashayed, were caught behind lorries and then when they tried to get out into the middle lane, no one let them out-sniggering as they went passed!
I arrived at the venue a few minutes later that I anticipated, but certainly less stressed that those beating their steering wheel in frustration.
So where am I going with this?
Clearly, investment markets have not played out the way we all thought they would. I think we all knew there would be some up and down stuff (Volatility) but that’s something we need, in order to drive growth, however, such bouncing around historically, would see investors hit the exit button, or at least make huge changes to your investment strategy.
In the same way, that swinging left and right on a motorway might appear you’re getting somewhere, but the stress involved in your timing to not only get out, but when do to get back in can be just as traumatic.
Making subtle changes & keeping the investment strategy is one thing, coming completely and sitting in cash or near cash (very low risk) for your entire investment, isn’t going to cut the mustard, because we have seen the growth investment funds can achieve. Last week for example, the Japanese stock market grew by 7% in one day. Sitting in a cash account, that same growth would taken 10 years to be achieved.
I know its difficult, but its a case of holding firm and staying true to the investment strategy you have chartered and remembering why you invested in the first place.
See you soon,
Victor.
