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Article 14 Investment Review and Outlook

Monday, 21st September 2009

What a difference a few months can make! Investment markets have performed strongly, since March this year, improving investor sentiment and driving up returns. For many clients the questions are all about the likely future direction of markets.

Our view over the course of the last year has proved to be reasonably accurate. A recovery is beginning in the major economies, yet there are a number of headwinds which suggest stockmarkets are likely to remain volatile for some time. For this reason we have taken a cautious approach to stockmarket exposure within our portfolios and expect to hold this position, for the short term at least.

The key words to investment success moving forward, will remain flexibility and good diversification of assets. The ability to alter your portfolio as this economic cycle continues to unwind is crucial.

I refer to the graphs attached, which show the movement of the four main asset classes over the past year.

As you will note, unless investors have been overweight in fixed interest (namely corporate bonds) they will not have been rewarded with returns in excess of cash. We have been overweight in the fixed interest market for some time but are now looking to reduce our exposure as the economic cycle develops. You will note from graph 2: the performance of our house portfolio over the last twelve months has produced returns of approaching 9%. This figure improves to over 13% over the last 6 months. This portfolio is cautious in nature.

In order to manage pension and investment portfolios successfully you need a mix of experience, data collection and technology capability. We believe our client investment proposition offers investors a competitive advantage from both an investment and a tax perspective, to ensure their assets are working appropriately to their needs, in an effort to target their future objectives. This is particularly important as investment performance can fall as well as rise,past performance is no guarantee of future returns.

If you would like to discuss your pension or investment portfolio or would like a brochure on our client proposition please contact us at our Newark or Nottingham office, or visit our website.