Thick and Thin – LANY

What is there to say after such a strong year? For the past few years the message from this note has essentially been to tune out the noise, stick to your plan and you will enjoy good returns.

In the midst of market anxiety, many investors need convincing of this, but less so now, when it is self-evident.

The question that naturally follows is what should we expect now? Should we ‘book our gains’, should we hold off before investing further funds?

The question that follows for us is whether we can add any value attempting to answer these questions?

It is very easy to fall into the trap of offering an outlook for 2020 and it is only natural that investors seek answers from investment professionals.

The honest answer is, of course, nobody has a clue what is going to happen this year.

We continue to believe that the risk premium on offer from equities today is relatively attractive and therefore we are not ‘booking gains’ and we are quite comfortable continuing to invest in our preferred assets.

We do expect global growth to improve this year and we expect a broadly supportive backdrop.

However, it would clearly be foolish to predict what is going to happen and after last year’s equity multiple expansion we should temper our expectations.

Then again perhaps this is too easy an answer. Perhaps I’m trying to have my cake and eat it too. Is there a better way to answer this question?

Out of the blue, the answer came from a client in an email yesterday.

Our client was not predicting the future or indeed asking us to. He had a simpler, more powerful message. It was the power of resilience and patience.

He thanked us for managing his expectations and for encouraging a long term mind-set.

He recognised that only through patient planning can we actually get to enjoy years like 2019. He acknowledged the need to stay invested through ‘thick and thin’.

Perceptively, he also noted that our clients should feel good about themselves – “because getting good advice is one thing, but acting on it is an entirely different one”.

No doubt 2020 will bring challenges. Here’s to resilience and patience.

Ian Quigley
T: +353 1 421 0300
E: ian.quigley@brewindolphin.ie

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