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Equity junkie, or bond addict? Eight readers' Lent sacrifices
by Libby Ashby on Mar 07, 2014 at 07:00
Time to kick that equity addiction, or let go of that desperate needy bond habit? We ask eight readers what they're planning to give up this Lent.
Peter Dalgliesh, managing director, Parmenion
What I am personally giving up: stop being disappointed waking up to rain every day.
Asset class to lighten up on: High yield debt – with spreads compressed and issuance volume rising while quality is slipping, the risk reward is not what it was.
Jeremy Dufton, investment manager, Raymond James
I am giving up arguing on Twitter with colleagues in the profession who think academic research always holds in the real world - because it doesn't, because they are entrenched in their views and so the argument is a waste of time.
Where I will reduce weightings: mega funds that everyone else holds because of scale or because you'll never get fired for buying them - because the flexibility and early mover advantage of smaller, up-and-coming funds offers something different for my clients.
Harry Morgan, head of private investment management, Thomas Miller
During Lent, I plan to reduce personal weighting through a ban on chocolate, and professional weighting to fixed interest by taking some more profits from conventional gilts. I have been a devotee of Fry's Orange Creams and 2019 bonds for years - it is time now to let go!
Alan Higgins, UK CIO, Coutts
I am giving up resisting buying more brown cars. I have 4, soon to be 5…
Earlier this year, we reduced our allocation to investment grade corporate bonds against government bonds and we are currently neutral on investment grade corporate bonds.
Martina Iannotti, assistant portfolio manager, James Hambro & Partners
Lent provides an opportunity to give up all the things that will hinder performance through 2014. I intend to give up being short term and to trust in my longer term convictions.
Volatility will be higher this year and it is time to banish thoughts of selling equities and back my judgment. From a personal perspective I will be officially giving up my New Year’s Resolutions admitting another year of failure. Self-denial and sobriety are highly overrated!
James Mahon, CEO, Church House Investment Management
Lent this year is somewhat of a different affair for me. Having recently seen a nutritionist, I have already had to give up coffee (very difficult), wine and all gluten and dairy products. The challenge for me will be sticking to the stringent diet throughout Lent, and over Easter!
In terms of investments, our risk process keeps us away from the more exotic asset classes but I am increasingly wary of equity valuations. Beside the rash of IPOs, other (soft) signs concern me. For example, the activist investor, Edward Bramson from Sherborne Investors taking a £100m stake in Electra Private Equity Investment Trust (10.2%) which has effectively closed the discount at which this (excellent) trust has been trading.
Kypros Charalambous, managing partner, Tacit Investment Management
As an ongoing theme, Tacit are avoiding medium and long term duration bonds
From a Greek Orthodox perspective, I will be avoiding meat, dairy products and oil but I will also try and take up the challenge of giving up chocolate as well!
David Michael, Associate, Reyker
Personally – I am giving up the use of public transport for my commute to work. Instead I am going to hit the streets of London and commit to cycling to and from work each day. Quite a sacrifice given the current rainy spell I am sure you would agree. Clearly the ulterior motive is to improve my fitness as I plan on doing a couple of cycle challenges in this summer.
For the portfolio’s we are looking at maintaining an underweight position in UK insurance companies. With the recent floods in the UK we anticipate a significant increase in home insurance claims in the near term.