Investment Thoughts

As I am writing this my partner has just driven off with our two youngest on their way back to school. Hopefully this is a good sign of the beginning of the end of the worst of this crisis.

Companies have behaved very differently at this time to any other period in my career by way of cutting / suspending dividends faster and more brutally than before in  previous Economic crisis. This is a reflection of two very different issues, in some cases this is strong companies just adopting a prudent approach to ensure they remain in a good position for the future, whereas in others, there are real economic difficulties arising.

The consequence of this is that if you are not spending the income you draw from your portfolio your consultant will have discussed with you the possibility of reducing the income you take, which will be helpful in allowing your capital to recover.

In building your portfolios, we always aim to buy the strongest companies we can and so hopefully as time moves on we will see this come through in the performance of them.

Markets have staged a strong recovery in some areas and less so in others. I think it is far too early to make any calls on this as I believe we will continue to see volatility until at least the end of this year as there are still so many unknowns.

As always, we continue to take the long term view, however, something that I have been talking about for some time now has clearly been very relevant in I this crisis is the difference between old and new Economy businesses, simply put, the difference between BMW and Tesla. I genuinely believe this crisis has escalated the rate of change and this will need to be reflected in your portfolio going forward.