Welcome to our summer newsletter. It’s the first one issued with me at the helm, and since taking on the role, markets have been choppy. As part of our ongoing due diligence with our investment partners, we have spent time with them over the last few weeks and heard what they’ve been doing to navigate the markets this year. Diversification and calm were key words.
We talk repeatedly about diversification as this is the core of our investment proposition. And calm wasn’t a word I expected to hear, but there was a calmness around the delivery by our partners. Yes, markets have been bouncing around. Yes, portfolios have been hit particularly by the increase in inflation, war, Brexit, and fuel. But managing the emotional side of investing is crucial in times like this. We appreciate managing emotions can be hard when it comes to money, and we do reassure our clients not to panic. If your financial objectives remain on track, you will be able to see out these tougher times. Ricky Clark of HLFP says “market volatility is always a risk with investments, and we have experienced many difficult situations in the past”.
SEI, one of our investment partners, talk here about “Resisting the Emotional Rollercoaster of Investing”.
We also asked SEI to comment on how they saw markets at present.
- The environment has changed.
- We have moved away from steady growth, low inflation and low interest rates into an environment of slowing growth, high inflation and rising rates.
- This change is impacting on investment markets.
- There is a significant rotation in terms of winners and losers taking place across asset classes and strategy.
- The new environment and the rotation have implications for the type of investment approach that might work best for clients.
- How well positioned are clients for higher inflation, rising rates and volatility?
- SEI’s research into similar environments from the past suggests that active managers who might protect clients from the changes taking place in the environment whilst also exploiting the opportunities change provides, might once again be justified.
Our job at HLFP is to make sure that we listen to our clients, and ensure they are in the right portfolio for them, and it’s doing the right job for them.
This month, I’ve been really pleased to see our full team return to the office, and it’s been a pleasure seeing people. It’s allowed us to collaborate again in a way I have missed. There’s nothing quite like looking up and seeing the dynamics of a team at work when we’re all together.
And of course, being back in the office means being able to see more of our clients. We won’t give up our virtual meetings as they are beneficial, particularly where time is of the essence, but I think it’s easier to concentrate on the matter at hand and listen when you’re in a space designed for that purpose. Not your kitchen table or your spare room.
With everything going on in the world, our natural bias is to listen to the doom and gloom as that’s what’s deemed newsworthy. However, as an optimist, I look for the good too and subscribe to some positive news sources. So for example, did you see that mobile phones are to be mandated by the EU to have the same charging port? That’s a game-changer in my house. And CNN has dropped their breaking news banner, saying it would only use it for genuinely urgent events as it wanted to “inform not alarm”. I think that’s a great move as banners can exacerbate feelings of overwhelming at a time when many people are struggling with negative news.
We also want to hear from our clients. We’ll be asking for feedback over the next few months, but in the meantime, feel free to drop me a comment.
And so, as an optimist, I’ll end with some positive news. We’re off out to celebrate Jim Wilson‘s covid-deferred birthday this month.
Kind regards,
Susan Pringle