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How we Invest

Global and Pacific-Centric

How we Invest

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invest money anywhere in the world


Many investors take a global view of opportunities in financial markets. Over the last decade investors have found that the performance of their portfolio depends largely on where they were invested and whether they chose bonds or shares or property. Their  combination of the major asset classes on offer has a big impact on returns.

The decade has been dominated by the banking crash and great recession in the USA, Euroland and the UK in 2007-2009, by continuing tensions within the banking and currency system of the Euro, and more recently by the collapse of oil and commodity prices. These big events have altered the valuations of shares between the major countries, and changed the ratings of commodity linked investments to other types of investment  substantially. Charles Stanley Pan Asset seeks to protect portfolios from losses when one of these large bearish trends emerges, as we did by moving into cash in 2008, and by cutting exposure to commodity based country and share investment after 2011.

The world economy lives under the long shadow of the 2008 crash in the main western countries. Japan is still working its way through the consequences of its own spectacular property and stock market crash of 1990. These crashes  have meant a long period mending broken banks, with reduced levels of new credit, and regulatory demands for banks to keep more cash and capital. This has been offset to some extent by large programmes of money creation in Japan, the USA, UK, and more recently in Euroland. Authorities have kept interest rates low, pushing investors to assume more risk as the running returns on government bonds have been so small.

Over the longer term investors have been rewarded for buying investments in higher risk emerging markets, where the growth rates are usually higher than in the advanced world and where there has been no general banking led crash during this century so far. However, the commodity price changes have meant the investor in recent years has had to be discerning, as emerging market countries like Russia that depend on commodity output have been badly hit by market events damaging their revenues. Individual emerging market countries like Argentina and Venezuela have also been in financial difficulties. Advanced country shares have benefitted from the impact of large Quantitative easing programmes supporting financial asset prices generally, and in the US in particular by the success of companies in exploiting new digital technology.

The evidence of recent years demonstrates that an investor needs to diversify a portfolio to reduce risks, and to keep an open mind on the asset allocation that will work best. The investment world changes so quickly, with large and worrying movements in prices in even high quality assets.

 

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