As we outlined at our Three Hurdles Investment Conference, we are currently navigating a volatile period where the outcomes of the US Election, Covid-19 and Brexit are binary matters meaning this will impact the markets one way or the other over the short term. This is important for new clients looking to invest cash now.
The approach that we have when putting new cash to work through new portfolios is both disciplined and flexible. Of course we are investing for the long term; however, it is important that we carefully invest the cash incrementally over the short term, to best take advantage of the current market volatility.
At this time, we are aiming to invest 100% of any new cash over a three-month period although this timing could be extended or reduced, depending on prevailing market conditions as we move through to 2021. Over the short term, we are currently investing 50-60% of the cash immediately, in order to take advantage of holdings on valuation grounds and which provide strong recovery opportunities. The balance of the cash will be put to work through the remainder of the portfolio, as and when, expected market volatility presents us with improved entry points for those holdings.
Overall, this approach ensures new investors have over half of the portfolio invested should markets rally and if markets endure a short-term correction, we have the dry powder to take advantage. The benefits of this approach will become more apparent as we move through 2021, when we expect markets to become more settled.
Important Information
This update is for information only and does not constitute advice or a recommendation and you should not make any investment decisions on the basis of it. The views and opinions within this document are those of Casterbridge Wealth at time of writing and may change without notice. They should not be viewed as indicating any guarantee of return from an investment managed by Casterbridge Wealth nor as advice of any nature. Past performance is not a guide to the future. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.
