We have just finished the first half of 2009 and it has been to say the least, interesting. If I was going to mark my own performance, I'd give myself a 'B'. Not an 'A'. An 'A' would require me to have invested my clients lump sum portfolio's into China, the S&P, Goldman Sachs and oil from March 9th. But I wasn't prepared to do that. I still believe that this is a bear market rally and that the first principle of investment is to preserve capital (particularly when its not your own).
The 'A' would have also required selling out at the end of June. I worry about investors who are still committed with large sums to equity markets that are presently struggling to maintain growth with thin volume and that were originally led upward by the financial sector. So I didn't participate. Instead we held gold and Yen. It was smart. It made sense. But jeez, it was tough watching the stock markets head north from the sidelines.
As Gladys Knight once asked "If we had the chance to do it over again, would we?" Yes Glad, we would.
The regular monthly plans also did well. Existing clients of mine were switched from equity funds to US$ cash deposits in August last year. From September 2008 we invested new monthly contributions aggressively in Emerging Markets. This strategy worked like a dream and so in May this year, we took those profits and again reverted to cash deposit with the monthly contributions heavily weighted in commodities and oil from June.
The challenge now is to maintain the B. If I can do this in the second half of 2009, I'll be a very happy man.
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