Beginner Investment Tips from Lloyds Private Banking Chief
In a recent interview with The Times, Lloyds Private Banking’s chief investment officer Markus Stadlmann offered his personal set of beginner investment tips for those just setting out on the process of building an investment portfolio. The good news for the inexperienced is the Mr Stadlmann believes that there are a significant number of factors currently in favour of investors. However, he also cautions that should not lead to complacency and that there are also potential hazards to watch for.
Stadlmann believes that the recent sharp market correction should not be cause for too much concern, with the wider investment environment largely positive. Global growth is strong and more evenly spread across international economies than at any time in recent history. He comments “indicators which we (Lloyds Private Banking) monitor suggest that this expansion could last for at least another 18 months”.
He suggests that while it is perfectly possible that further corrections could be a feature of coming months, this is unlikely to turn into something more serious. If anything, the recent correction has taken some of the heat out of markets and any further dips can be considered good buy opportunities taking advantage of lower valuations.
Asked about his beginner investment tips for a new £10,000 portfolio, Mr Stadlmann offered his suggestion for a good starting mix for the year ahead. He is particularly bullish on Japanese equities, despite their already very strong 2017 performance. His optimism is based on corporate profit margins being currently higher than the country’s economic peak in the 1980s and believes current growth rates look sustainable. His tip is a £4100 allocation to the Schroder Tokyo Fund, managed by Andrew Rose, whose experience in Japanese equities stretches back over 3 decades and also studied in the country as a university student. The fund charges 0.84% per annum.
His next tip is a £2600 allocation into a bond fund, the Pimco Low Average Duration fund GBP Hedged. It charges 0.75% and offers asset diversification to protect against any downturn in equities markets. The remaining £3300 of an initial £10,000 beginner portfolio Stadlmann suggests going into the GAM Cantab Ucits Core Macro fund. The fund manager bases investment decisions on algorithmic computer models and this fund invests globally as well as taking short positions if it anticipates declining markets. The fund’s management fee is 1.25%.
These three allocations would be expected to provide strong diversification, while keeping a good upside, within the limits of an initial £10,000 investment to start a portfolio.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.