UNIMAGINABLE WEALTH WITH THE CLICK OF A MOUSE
YOU CAN MAKE $3000 IN 24 HRS. WITH CLICKS VALLEY
That’s from a recent e mail that arrived in Junk. As I deleted it I paused for thought. Wealth is such a common word and $3000 unimaginable wealth – really? OK, if you stick to the plan, 24 hours a day, for a year you scoop $1,000,000.
More importantly it set me thinking about my investment objective. I suspect the objective for a lot of people is to make money but I don’t want to do that. If you want to make money you must be prepared to lose money. My objective is to protect my savings by investing in things that in the long term should go up in value and protect me against inflation. OK, I do have a sprinkling of more exciting investments but the overall stance of my portfolio is defensive.
The anchor for my portfolio is McInroy & Wood’s Balanced Fund. It lost 2% in 2018 but made 1.2% in January 2019. The fund size is £694 million and it was launched in 1990. Since then it has increased by 827% or, if you prefer, an average return of 8% a year. It only yields 1.4% annually which might put some people off. It is not very exciting. (If you want to be in Tesla, Amazon, Netflix, etc head for Scottish Mortgage.) M&W’s Balanced Fund is just 60% invested in equities, 34% in bonds, 5% in gold and 1% cash. The gold is an insurance policy against a market meltdown. I know I’m never going to make a fortune but I know that I won’t lose my shirt if there is a collapse in equities. As one of their directors put it to me: “we’re not trying to blow the lights out”.
All I really want to do … is preserve my capital.
If you have a secure income, I would think 34% in bonds would be excessive given the long term performance of a good spread of equities.
M & W and Personal Assets have both reduced their exposure to equities. This is a reaction to current uncertainty and, possibly, the end of a ten year bull market in equities. The composition of both funds can and will change.