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LETTER FROM AMERICA: MARKETS DOWN? TIME TO SUIT UP

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As Bill Hicks once said, â??oops, did I leave a cigarette lit or something?â??

As I writeâ?¦

â?¢ Dow down 6.5%, over 1,000 points.
â?¢ FTSE 100 down 3.5%
â?¢ China down â??a shitloadâ??
â?¢ European indices down over 5%
â?¢ Twitter meme incidences of â??traders with head in handsâ?? up by 5 million percent.

So the correlation of two lang cats leaving the UK to work on the USA PR and marketing operation for one of our clients and sniff around roboadvice while weâ??re here to global market meltdown is exactly 100%. Anyone who wants to pay us loads of money to stay put in future should apply at the number below.

Actually, apart from the fact that everyone has a little less money now, and with a decent beer in New York costing $10 that’s an issue, thereâ??s some good news in this.

As you probably know, we do lots of analysis of advisersâ?? Centralised Investment Propositions, especially in the outsourced market. If you didnâ??t know, youâ??re forgiven, but should read up here. Nearly all the risk-banded multi-asset funds or model portfolios offered by DFMs have the same belief at heart â?? that they can control volatility by using a) good active managers and b) non-correlated asset allocation.

Over on the other side, the passive hounds bark that this is all a load of mince, and that the ability of these propositions to do that is unproven.

When we analyse portfolios, we look for major corrections in the market which provide a very useful reference point. We can run performance before, during and from the point of whatever market event is making everything go shoogly.

Our best model point before today was 2008; a time when relatively few of the propositions advisers use were around. So thereâ??s a huge amount of survivorship bias and general skewing, which is a pain in the Ronson when youâ??re trying to draw conclusions.

But rejoice! Not only do we get a nice new model point for our analysis, this is a BRILLIANT OPPORTUNITY for all the active managers, multi-asset / multi-manager funds and DFM model portfolios to show how good their vol control is and how they â??add valueâ?? (bleeuurgh, their words not mine) in a market which isnâ??t simply rising.

Lads, itâ??s time to suit up and prove the doubters wrong. Give us a shout and let us know how you get on. Weâ??ll be watchingâ?¦

uok

Posted in: #Investments   #Uncategorized  

About Mark Polson

lang cat founder and boss. Expert on all things platforms, pensions and investments. Prolific writer and public speaker, even when people ask him not to be. Knows more about Scandinavian black metal than you, and isn't afraid to prove it.