There was a very interesting picture published in a Scottish paper recently of a queue of people at an ATM somewhere in Glasgow that was giving out “free” money.
How this came about I don’t know or what the ultimate outcome was I’m not sure. Also I will refrain from commenting on the morality issues, but it demonstrates a type of human nature or response when a financial advantage seems on offer.
We like nothing better than a bargain or even more so to be on a sure thing with a nice wedge to be had.
Part of the upside of any monetary gain seems to me in telling others of our good fortune, astuteness at recognising the opportunity and how much we scored!
There is an equivalent response from clients in current market conditions.
The continued go-forward of global equity markets has induced a kind of group response to making sure we get the most from this ourselves even if it can’t/won’t be sustained and if it exposes us to greater risk then we’d normally want.
I’m not blaming our clients for wanting more returns as they’ve typically endured a pretty rough ride over the last few years, but as we have told them in difficult times, don’t panic, then we must say the same in an upturn.
Not making rash investment decisions in volatile times and sticking to your risk profile, asset allocation and maintaining discipline and remaining invested have been the key messages to clients of late.
I’m still saying the same thing to clients today.
Naturally, we are having conversations around increasing risk to get more of the pie but a quick reminder of how quickly things can change and to reinforce the long term nature of investing usually bring sense to proceedings.
If there has been a genuine change of circumstances that would shift risk appetite, then fine we can deal with that but only within our investment framework and definitely no chasing wild ideals or abandoning the underlying investment philosophy.
The Informed Investor brochure we produced few years ago set out our approach to investing for our clients and I believe nothing has changed just because we’ve got some positive numbers to talk about.
Never has a popular catchphrase seemed so apt;
Don’t panic Mr Mainwaring!
Roland Oliver