Thoughts from Saltydog Investor

The purpose of The Saltydog Investor is to help the frightened and uninitiated take their first steps into the world of self investing, whilst assisting those already engaged to greatly improve their returns.

We believe in being active investors as opposed to passive. The Finance Industry is mainly an advocate of passive investing and will tell you to choose a good fund manager in a growing sector of the market, and then stick to him through thick and thin. However as we all know, sectors go out of fashion for many reasons and fund managers’ crystal balls do not always work. The recent performance of Neil Woodford’s Income Fund is startling evidence of this phenomenon. After being right for so many years he got it wrong! This is not to say that he is not a brilliant investor, it is just the way the mop flops in real life. You cannot always be right!

I understand that fund and sector performance can vary because of managers, politics, and economics. Look what is happening at the moment as markets across the world have re-acted badly to President Trump establishing trade barriers.

There is also something else occurring that really confuses me, and that is why do the Fund Houses performances rise and fall? By that I mean sometimes a particular company will have many of its funds crossing the line first in many sectors, then a year later the company name has lost its shine and is rarely to be seen. Over the years that I have been investing this has applied to Invesco Perpetual, AXA Framlington, First State, Jupiter, and Investec. In fact a company`s star may shine briefly before fading away, only to come back at a later date.

At the moment Baillie Gifford would seem to be carrying the torch and its funds are all over the Saltydog numbers.

B.G. Greater China….B.G. Emerging Market Growth….B.G Pacific….B.G. Japan Small Companies….B.G. USA….B.G. Global Discovery….Scottish Mortgage Investment Trust….Monks Investment Trust.

In the case of Baillie Gifford their concentration of success at the moment appears to be on global and technology funds, so perhaps conditions in these areas are favouring the skills of their fund managers. Mind you, with what is happening in the USA at the moment with the installation of import tariffs, this area of expertise is going to be sorely tested!

I am not sure whether there is anything to be gained by recognising that Fund Houses go through good times and bad. I have never to my knowledge been able to take advantage of these events. At the end of the day surely I am only interested in the performance of the fund and not its owner.

A bigger question at the moment is what percentage of my portfolio should be in cash and which funds will protect me from Mr Trump and a falling market? Today`s situation is very unsettling, but I guess it is a little like old age, it won`t last!

Best wishes and Good investing,

Douglas.

Founder & Chairman

www.saltydoginvestor.com