A strong rebound in stockmarkets from the pounding shares received at the end of 2018 catapulted the Money Observer model portfolios firmly back into profitability during the first quarter of 2019.
Constructing a diversified portfolio that is well-placed to weather storms and take advantage of future bright spots is no mean feat. That is where Money Observer’s 12 model portfolios aim to help investors reach their financial goals.
TR 1 year 11.4%, 3 years 75.8%, yield 0.5%
The UK equity market lagged international stock markets in the first half of 2018, and it was the same story in the third quarter, with the FTSE All-Share index posting a loss of 0.8 per cent. In contrast, the FTSE World index returned 6.2 per cent in sterling terms.
While the underperformance of UK equities may whet the appetite of more contrarian-minded investors, as far as our model portfolios are concerned, it was a big factor behind eight of the 12 falling short of their relevant FTSE UK Private Investor index benchmark in the three months to 1 October.
Markets shook off a rocky start to 2018 to return to form during the second quarter – and propel the Money Observer model portfolios firmly back into the black.
All 12 of our portfolios beat the relevant FTSE UK Private Investor index benchmark during the three months to the end of June – some by as much as 3.5 per cent. That saw them recoup losses incurred during the volatility that pervaded investment markets in the first quarter of the year – and then some.
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Scottish American Investment Company was founded by William Menzies in the 1870s, after a series of visits to the US left him impressed by the wealth and opportunities the rapidly industrialising country presented. Being the most exciting emerging market of its day, America, it was hoped, would provide strong returns for investors in the UK.
Even long-term investors occasionally take advantage of a short-term opportunity in the stock market. Mike Deverell at Equilibrium, manager of our long-term growth portfolio, sprang into action in February when the FTSE 100 index slipped.
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Probably the most influential book I have ever read about investing was One Up on Wall Street, first published in 1988. The author was Peter Lynch, who achieved fame and fortune managing the Fidelity Magellan fund in the 1980s. Lynch worked for one of America’s pre-eminent fund management companies. He was a pro through and through, but he was also an enthusiast, a stockpicker who loved nothing more than to figure out companies.