Using Themes to Invest with your Head, not Heart


Whether it comes to Covid or a sticky election, people do not like uncertainty. There will always be an issue somewhere in the world that either buoys or drags down investments. Over the past year we have seen some big things happen that have caused people to worry. When we talk to you about your investments, emotion is the biggest killer of a good plan. This is why we look to our partners to help us steady the ship.

If we give in to the spectres of doubt without a basis of how that impacts the future, then we have reverted to letting our hearts lead when our head should stay strong.

You can take solace in knowing that within our team, our wealth and relationships have survived much worse than what 2020 has shown us, though it may not have felt like it when the market went into freefall back in March. There is typically a greater likelihood that the longer you stick to an investment plan the more likely you are to succeed through decent returns.

I also turned to our partners during these difficult times for reassurance. Working with Russell Investments and their team of specialist fund managers gives me a greater peer network in which to talk through opportunities and debate challenges and strategies.

In my opinion, investment houses can be differentiated by their growth strategies: they either lean towards star investments or momentum. Russell Investments puts a lot of research resource into changing global conditions and builds them into Themes around which Investment packages are created – they are focussed on momentum.

Each Theme has a story rooted in the financial impact with the main characters being those companies who will benefit. Sustainability is top on the agenda of many governments as it challenges the old ways of investing because oil companies typically are at the head of most market indices. With the move towards environmental friendliness, oil companies are having to shift to more renewable energies and losing their foothold at the top of major markets. This in turn has given rise to technology companies taking over as the head of markets and the oil companies that are moving towards more green solutions are replacing the ones that are not being as dynamic.

These stories allow an investment manager to build the portfolio of companies that will benefit all around. The key is that most investment companies have a number of themes and this guideline how they use the themes to build a portfolio. As your investment adviser, it is my job to work closely with you to identify the best portfolios which meet your specific needs, at your measured level of risk, and achieves your overall wealth plans.

2020 has been a great year for learning patience and steadfastness with our investments. Congratulations on setting a plan and staying the course.

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