Over the past decade we’ve noticed a phenomenon where investors have been taking increasing amounts of risk in exchange for ever lower returns. Following the 2008 financial crisis, Central Banks attempted to stimulate the economy with rock-bottom interest rates and unprecedented monetary policy.
These actions caused bond yields to drop to all-time lows, effectively forcing investors like you into riskier investments, in search of higher income.
But as the current market cycles grows longer in the tooth, you may now be holding a potentially dangerous cocktail of assets that are riskier than they may have first appeared.
Traditional approaches to managing risk in this type of environment often mean disposing of riskier assets and moving into safer havens, such as government bonds or cash. The problem is that neither offers you a reasonable return in the current climate.
We believe an effective approach is to hold high-quality, compounding assets that can generate sustainable returns for the future. The further we get in the market cycle, we may still want to remain fully invested, but we want to gradually dial down the underlying risk content in portfolios.
So with that in mind, we gravitate towards high-quality, shorter-duration fixed income and we slowly increase cash levels.
In short, we keep dancing but we move closer and closer to the exit door.
At London & Capital, we believe the key to successful investing is through active risk management, rather than by chasing returns. We follow a disciplined investment process that is shaped by our dynamic approach to risk and aims to ensure portfolios contain the right amount of risk for the client, no matter the market conditions.
Iain became a Partner of London & Capital in 2008 and heads the firm's Private Investment Office, which he founded in 2013. The Private Investment Office provides wealth management services for some of the firm’s largest clients.
Prior to joining London & Capital, Iain ran his own wealth management business for five years, in association with Zurich Financial Services Limited, where he built and maintained a significant high net worth client base. Before that, he was a partner at Freeman, Farmer and Anderson Company at only 27.
He has been awarded the Investment Management Certificate, a Diploma in Financial Planning and a BA Hons degree from The University of Manchester. He has been named in CityWealth’s ‘Top Private Bankers & Investment Managers’ leaders list for the past 3 years and was named in PAM ‘Top 40 under 40’ in 2013.
To arrange an introduction to London & Capital contact us using the form below or by phone: +44 207 396 3320