The one thing you always need to look out for when investing are the trends…and there are quite a few!
First of all, you have to keep in mind the areas which are available to invest in. Over the years, we have seen funds for Technology, Financials, Healthcare, etc. but they all tend to have a start point and an end point. The last thing you want to do is invest when an area is getting near its end point and is about to fall; you could lose big in that respect.
You also need to look at geographical areas as well, as they too follow trends. For example, Emerging Markets can do well for a period and then fall away terribly as their economies stutter.
At the present time, when we have been preparing our new Recommended Fund Lists, we have noticed there are more and more Global funds performing well enough to be included. This includes a variety of options, like Global Alpha, Global Smaller Companies, or the simple but effective Global Growth.
What this means is that these funds have a pretty wide remit and so can look for investments (to make them grow) just about anywhere. Therefore, they may represent a better approach to investing than most. However, do bear in mind that they could possibly be a jack of all trades, and master of none. They might have a bigger area to work in, but they have to do a lot more homework before finalising their investments, i.e. decisions are made too late either to get involved with good investments and/or to offload bad investments.
What we find the best indicator of all is the trend of performance of funds; we always look at that over 1–5 years. It is far better investing in a reasonably consistent fund, taking into account its economic background, than merely looking out for high flyers which may be the big drops of tomorrow. Consistency in our opinion is key, and is what we have watched at MAP over the years. You can get good performance in 1-2 years, but bad performance is more possible at any moment. Good performance over 5+ years is special and should be looked out for.
We make up our recommended list of funds based primarily on consistency, as long as it has half-decent performance throughout. When we invest client money therefore, we are looking for that performance to continue for a reasonable time at least, and we continue to monitor it, to ensure it achieves that.
When you are looking to invest, you too should be looking for that consistency of performance. It will allow you to plan investments a lot better and should require less ongoing maintenance and less stress too!
If you would like to benefit from our hands-on approach to investing, why not contact us on 0345 241 1808 or email us at: firstname.lastname@example.org.
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