Published: 26th May 2020 (5 Min Read)

Two months ago, I was blitzing social media with thoughts and opinions about the global pandemic, policy responses, the impact on economics and portfolio positioning. Since then I have maintained a low profile but have decided to break my self-imposed silence.

So, why the silence and why end it now?

By the end of March, I felt I had said what I had to say and that I could not add anything further which might be helpful. Every investment strategist I knew was offering pearls of wisdom, with limited additional insight. This was becoming tedious and I didn’t want to add to the store of cluttered inboxes.

It was time to admit that having a head full of information didn’t necessarily make me well informed.

More constructively we also needed to review the holdings and structures of our clients’ portfolios to ensure that they remained relatively resilient.

Thankfully, relative to markets and, so we believe from what we have been told, to many of our peers, the portfolios have been resilient. Our commitment to diversified portfolios, well-financed, quality growth businesses, and our avoidance of sectors we don’t like, has proven well-founded.

At times like this active management proves its merits.

We have held review meetings with the managers of the substantial majority of our holdings since lockdown began and, with few exceptions, we believe that they have made the right choices, and we remain committed to working with them. Our commitment to long term, resilient, investment themes, rather than short term speculation or investing in an index, holds good.

If anything, some commercial and social themes have been accelerated, and we have added some new ideas to be considered in the future, many of which embrace themes of greater digitisation, a more sustainable world, and a more caring society.

Why am I writing now? In part because much of the review is complete, but also because we are now, we hope, at the beginning of the endgame.

Emerging from lockdown will not be simple. Some aspects will be controversial, and mistakes may be made. The potential for policy error is now significantly greater than it was in the last few years when we were already worried about it. Central banks will not provide unlimited largesse forever. Some industries will thrive while others will falter, and not at the speed we may currently expect.

We will continue to focus on the long-term health of clients’ portfolios, thinking slow rather than fast, and embracing the future rather than the past.

In the coming months I expect to write on a number of general themes: first, “the end of” – a series of ideas about potential change, such as “the end of cash?”; second, “away from the spotlight” – on meaningful developments which have carried on quietly while the main focus has been on the policy megaphone; and third, a return to “fiscal flavours”, as policymakers around the world embrace higher levels of spending, some in quite different ways.

I have also been thinking about inflation, the future path of interest rates, investment income and savings rates, and will address these topics too.

I hope there will be something of interest for you.