|Michael Berry Introduces Killik & Co|
New Chiswick branch offering bespoke investment solutions
Michael Berry introduces Killik & Co:
"It is a very interesting time to be opening a new branch. On the one hand we are seeing demand for investments that can provide a better return than cash deposits given that RPI (a measure of inflation) is currently 5%. On the other hand the extreme macro concerns, primarily concentrated around global growth and the potential for sovereign debt defaults in the Eurozone, has led to a decrease in investor confidence. It is increasingly difficult to predict how stock markets will perform over the short term as markets will continue to be driven by macro policy decisions. However, we strongly believe that an investor’s best response to this uncertainty is to define their financial goals and create an investment strategy that is suitable for their risk profile and time horizon.
"For the investor that can take a medium to long term view (typically 5 to 10 years), whilst accepting capital volatility over the short term, the stock market represents an opportunity to acquire high quality businesses which are trading on historically low valuations. In an environment where we see a sustained period of subdued global growth, we believe that dividends will be increasingly important when analysing total portfolio return and as a result we believe that high yielding equities, which can provide an income in excess of 4%, offer a very attractive asset class. Alternatively for those investors that do not wish to invest directly in to the equity of a company (shares) and favour a fund based strategy we look for Fund Managers that employ a similar investment criteria. A fund will typically invest in to the equity of 30 or more companies thereby diversifying the risk associated with owning shares directly.
"Whilst we believe that equities offer good value on a long term view we advocate a balanced approach to investing, which should include exposure to a number of uncorrelated asset classes. This helps to increase the probability of a given return, reduce volatility and smooth investment returns. For those clients who want to achieve a balanced portfolio or do not wish to invest into traditional equities there are a number of investments with a more predictable return profile. For example a growing number of businesses have been raising money by issuing corporate bonds aimed directly at retail investors. This process was kick-started by the introduction last year of a retail friendly dealing system for bonds which enables investors to buy and sell after the issue date and before maturity. Since launch the retail bond market has grown significantly and now offers a wide range of issues with typical yields in excess of 5% and maturities between five and ten years. Bonds have a much higher certainty and probability of return over a given period relative to an equity based investment and have historically seen much lower levels of volatility.
"Despite recent stockmarket volatility we believe that, with the correct advice and guidance, investors are able to preserve and grow their wealth if they or their investment adviser takes a ‘hands on’ approach to managing their assets. We have seen over the last decade that the buy and hold strategy does not work, in fact the last 10 years would have provided flat returns for many stock market investors who employed this strategy. We believe a dynamic multi-asset strategy where the asset allocation is constantly monitored and adjusted depending on the global economic backdrop can increase the likelihood of meeting investor’s financial goals.
"If you’re interested in becoming a client, or just want to know more, please feel free to contact us on 0208 090 3303 or pop in to the Chiswick branch. We can offer you a review of your current investments and pension arrangements without obligation or charge."
October 21, 2011