by Nick Britton
On the cusp of 2018, the investment world seems sharply divided between optimists and pessimists. The glass-half-empty camp worry about soaring valuations, asset bubbles, escalating geopolitical tensions, debased currencies and complacent investors. The glass-half-full lot counter with the whirlwind pace of technological progress, resilient brands, a revival among developed economies, and an increasingly confident emerging market consumer.
Our fund manager poll encapsulates the divide. While 69% think stock markets will rise in 2018, the remainder are less confident. Some 60% think equities will be the best-performing asset class in 2018, compared to 76% in last year’s poll. Given that many respondents’ mandates oblige them to invest in equities, the findings seem to signal caution.
The probability is that both optimists and pessimists will be proved right, but over different timescales. The pessimists are right that valuations will get you in the end. They always do. But when? The optimists are right that what Walter Price of Allianz Technology Trust calls the ‘Fourth Industrial Revolution’ constantly proves the doomsayers wrong. Tom Slater of Scottish Mortgage talks of ‘phenomenal businesses’ such as Amazon ‘that have proven to be more powerful than we ever dared to imagine’. Then there are the Chinese equivalents, such as Tencent and Alibaba: the latter saw $25 billion of business done on its platform on a single day, 11 November – four times the aggregate value for every website in the US.
Scottish Mortgage, and many other investment companies, remain firmly focused on the future, utilising their closed-ended structure to extend their investment horizons. They have been doing this for a long time. The first investment company, Foreign & Colonial, was launched in 1868 and next year we celebrate its 150th anniversary. Look out for an invitation to a big party we are throwing in September.
Much sooner than that, we’ll be running three VCT seminars in January – you’ll find dates and times below. The Autumn Budget brought some significant changes to the scheme, and we’ll be unravelling these with the help of leading VCT managers. I hope you can make it.
Until then, it only remains for me to wish you a very merry Christmas and a happy and prosperous New Year.
Nick Britton, Head of Training, AIC
17 January 2018 AIC VCT Seminar (Knutsford, Cheshire) Lunchtime seminar hosted by Nick Britton (AIC) with guest speakers Alan Wallace (Octopus VCTs) and Tim Levett (Northern VCTs).
18 January 2018 AIC VCT Seminar (Leicester) Morning seminar hosted by Nick Britton (AIC) with guest speaker Alan Wallace (Octopus VCTs) and another speaker (TBC) from the Foresight VCTs.
31 January 2018 AIC VCT Seminar (London) Morning seminar hosted by Nick Britton (AIC) with guest speakers Trevor Hope (Mobeus VCTs) and Patrick Reeve (Albion VCTs).