Investment of the Week: Invest in a global market
As Trump takes the White House, Holly Mackay tells you how to implement financial damage control
When you work in investments, you’re often asked for tips. The trouble is, most pundits are not bold enough to state the unpalatable truth; simply that trying to predict the future, consistently, is impossible. Just ask Hillary Clinton and David Cameron.
My top tip this week is to go global. Will America rally this year? Will the UK crash in a hard Brexit fear? Will China’s debt bubble burst? Do any of us really know?
If you’re not sure, then pick a global fund, spread the risk around and get the managers to worry about this for you. A so-called multi-asset fund is like an investment ready-meal which has been blended for you with a dollop of everything. Have a look at the Vanguard LifeStrategy range or Blackrock Consensus funds.
If you want something a bit spicier, I like managers Lindsell Train whose UK and Global equity funds I hold. Terry Smith at Fundsmith has been a very good stock picker. JP Morgan have a good track record in Emerging Markets.
Also, keep costs low. Passive investments don’t employ expensive people to try and outsmart the markets – they just follow an index. E.g a FTSE 100 tracker will hold the 100 biggest listed companies in the UK. You can get a passive fund for about 0.25% a year and it’s a great way to get going.
As a final thought, women tend to make better investors than men because they are less likely to tinker – to fiddle. The best tip would be to set up something low-cost, something which hedges your bets and diversifies, and then to ignore the cabbies and the papers when they shriek boom or bust. Save your fiddling for something else.
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