Practical investors are risk averse, however risk is defined. And British investors are facing levels of risk unprecedented since 1940.
A modest-sized economy is launching itself into a trading world that has consolidated into warring trading blocs. It has demerged itself from one such neighbouring group with a definite decline on GDP growth, and is now so politically split that the future cannot be predicted.
Compounding is about patience but also avoidance of unnecessary loss. The FTSE may be cheap, or even good value, but since nobody can agree on the country’s future, the outlook for UK asset prices is unverifiable. Best to diversify internationally through global investment managers such as F&C, Witan or Alliance Trust.
Safe, rather than sorry, is the watchword of the best of the old-style investment trust managers, and that should do for us at this tricky moment.
