My days are quite hectic at present. In an effort to prop up the pensions of the older generations I have recently purchased my first house. At Whitechurch we extol the virtues of value investing, and I was keen to practise what I preach, so I bought a complete wreck and implemented a turnaround strategy.
At present my day starts at 7:15am, it is a mild October morning and the house is freezing. I realise the insulation is probably lacking – I will add this to my ever growing list of projects. There is no kitchen at present so breakfast is not an option. I head off to the office in search of warmth.
Today is investment meeting day, and although the team all sit together around one desk, once a month we have a formal investment meeting starting at 10am.
We discuss recent news flow across each asset class and regional equity market, followed by any updates on the underlying funds we invest in, their recent behaviour versus investment style, and the performance of our model portfolios.
We also discuss any areas of special interest that require more detailed research in the coming month. This month I will be paying special attention to the quarterly Consumer Credit Survey released by the Bank of England as this should give a better gauge of consumer and banking confidence in a post-Brexit world.
We have a portfolio meeting in the afternoon where we discuss asset allocation, and fund selection, but before this I must refresh our data feeds which monitor the behaviour of our model portfolios, and run through our risk management process.
I am pleased to report the portfolios were all behaving themselves. Although given we have become more cautiously positioned over the previous 18 months this was hardly a surprise. Safe in the knowledge that our portfolios remain within their risk parameters, I head out for lunch. Today is falafel day.
The portfolio meeting brings with it the ongoing discussions over what we call the ‘bond-conundrum’. Yields and yield curves are exceptionally low across the world, and the performance from index-linked gilts and longer duration corporate bonds has been stunning this year.
We discuss potentially reducing exposure here, but finding alternative income sources is increasingly challenging across every asset class. Within higher risk portfolios we discuss the lack of a decent Bric option given our positive stance on all four markets. We remain concerned about the short term liquidity flowing back into emerging market debt.
Given our optimistic outlook for fiscal easing in developed markets, we believe developed market bond yields could rise and steepen, leading us to ask is there the potential for a fiscal driven ‘taper tantrum’ style event within emerging market debt and we continue to avoid the asset class.
Before leaving the office I deal with a few adviser enquiries that have come in throughout the day and then head off to a meeting with a chief economist who will provide their ‘guide to the markets’, I sense discussions may revolve around Brexit.
I arrive home by 9pm; I think I might leave the heating on tonight.Jonathan Moyes is an investment manager at Whitechurch Securities.