Offshore Investment Opportunities
Predicting future trends is a risky but necessary investment process.
Michael Wilson finds out where our panel of advisers will be
placing their money
October has always been an interesting month for investors
and this one is shaping up nicely. As the first firm autumn
trading figures reach the markets, after the long phoney wars
of the summer, analysts and advisers get their first opportunity
to take a good hard look at where the world is really heading
now that the fund managers are back at their desks and the politicians
are back on their benches.
October is often the month when economists suddenly notice
some major imbalance that they’ve been quietly ignoring
since the spring - an overvaluation of the yen, perhaps, or
an undervaluation of bonds, or a looming shortfall in oil reserves.
That’s when the markets go into hyperdrive with some ill-considered
over-reaction and we get the kind of panicky situation that’s
so often spoilt the party for investors who aren’t on
their guard.
Offshore Investment Opportunities - International Panel
So it’s especially good to find that this time our international
panel of financial advisers is in a quietly confident mood. Yes,
they’ve been telling us, there are uncertainties on the
world stage at the moment - a sharp rise in oil prices, a lot
of European noise about the euro and a US presidential election
just around the corner - but on the whole the world seems to be
moving along well enough from an investor’s point of view.
The US economy is still chugging along nicely, the technology
sector is heading back in the right direction after its troubled
summer and the recent wobbles in the euro have been addressed
by some fast and decisive action from the European Central Bank.
Japan’s new prime minister seems to be settling into the
job reasonably well, and even Russia’s President Vladimir
Putin appears to have survived the political disasters of the
last two months - though he might not find things so easy this
winter.
Offshore Investment Opportunities - advisers
Our advisers have been quick to remind us, of course, that they
don’t speak for the stock-pickers and short-termists. Most
of them focus on the long-term business of insurance-related investments,
including pensions and so their portfolios tend to be made up
almost exclusively from holdings in wholesale funds provided by
other fund managers. This, in turn, means that short-term stock-hopping
would actually be against their clients’ interests, because
the additional administrative costs of making too many trades
would kill the performance of their portfolios.
It’s essential to hold onto the long-term view. The
biggest area of disagreement in our panel seems to centre on
the continental European markets, especially in the wake of
Denmark’s recent referendum vote against joining the single
European currency. A fairly clear dividing line quickly became
apparent between those advisers who fancied the underlying strengths
of the Eurozone economies and those who felt that the future
still lies with the US.
Offshore Investment Opportunities & Graham Reid
Graham Reid, director of the Brussels-based Classic Financial
Solutions, leads the pro-euro camp. Many of Classic’s customers
are UK expatriates who have moved to continental Europe for periods
of three to five years, usually in the course of their employment,
and they tend to be heavily committed to the euro (although he
believes that his non-resident investors are just as happy with
the new currency).
He says that, on the whole, they are investing for the medium
term and that many are thinking of retiring in the Eurozone.
So they tend to take the ups and downs of the troubled currency
in their stride. At present, he’s advising his clients
to put a minimum 70 per cent of their money into euro-denominated
investments, and if things improve, the ratio may rise as high
as 80 per cent. Dollars will normally make up most of the rest.
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