Is this the bottom?

I have been banging on and on about markets for ages now. Telling people: “You can have too much of a good thing!” but will they listen? Actually those that truly listen to their financial adviser will do well or at the very least suffer less than just sitting there and hoping.

What does a true fund manager do in his job? If he is trying to get the best of all things then he is being balanced in his approach. Further if you use best of breed funds then you can get a great result.

Since 7th April 2010 I have been keeping a close eye on the markets and running my own specimen balanced portfolio. If I had chosen to place an imaginary £10000 in a tracker fund that merely follows a chosen index; let’s see how would I have got on:

Had I invested £10000 in a FTSE 100 Tracker fund I would now have £8785. The Japanese Nikkei would have given me a return of £8761. However, had you chosen to give the money to a wealth manager and he had assessed your attitude to risk he would have spread the funds across a few countries, a number of sectors and placed the funds with proven managers. The result is that you would still have £9410.

The week that just ended (21st May 2010) has seen the markets fall quite dramatically since beginning of April. Last week the Japan market dropped 6.5% a record drop for 18 months. This was based on the debt crisis in Europe. European Shares were depressed but did rally at the end of Friday. So too the London stockmarket: it was some way down but ended up just 10 points adrift.

We have seen some awful lows and we had a very strong rally recently but to my mind it was too much too soon and after the euphoria of the General Election we are down to business as usual and maybe the focus will be on the effect of the forthcoming public spending cuts in the UK. So in this cycle we may have reached a bottom but my advice is plain: get yourself a financial adviser who is recommended to you by a friend or another professional. Trust him and follow his advice. If he does his job well you will get your investment monitored regularly and he will be telling how well you have been doing. If you have done well never be afraid to take a profit and don’t be shy when markets fall to consider a readjustment to your portfolio to take advantage of lower prices. The trick is to buy at the bottom but we never know where it is. However, I will give you a tip the market is lower than it was a month ago!!