15 May 2013

So often I hear commentators (journalists, advisers, traders and others) comment on the old saying ‘sell in May and go away’ many of them not even knowing the other half of it: ‘don’t come back until St. Ledgers Day’. Most, if not all have not understood the concept and continue to convey information about the subject to which they themselves have never followed or used in practice. The ‘trend’ has and still does continue to exist, it may be that due to global macro conditions or as the case is now: extremely loose monetary policy around the world, the pattern gets retarded, delayed or extended. For example it didn’t occur last year (see my tweet of 12 May @commonstocks)

The point of selling, however, is not purely based on this strange phenomenon ‘sell in May’. Like any investment decision it is based on (primarily) valuation. The biggest misconception about this strategy which most commentators seem to believe is that one sells 100% of everything  you have in May and go to a full cash position! 

Sell in May is merely a seasonal pattern an is used to trim over-valued equity positions back to a neutral weighting in a portfolio or back to an average cost price. The overvalued equity positions could be trimmed by between 10% or 50% depending on the valuation and the existential risks in the market and the prevailing macro economic conditions.

Doing the above and then reversing it again in September / October can add slightly better performance to a portfolio, I MUST STRESS that this process is not an investment strategy on its own- but merely a play on seasonal shifts in equity pricing. Many advisers and fund managers out there believe this process to be a stand alone investment strategy.

Any investor, fund manger or adviser still has to follow a disciplined investment strategy such as value investing or the like.

Very pleased to announce the appointment of Mr Robert Fisher as Yellow Capital’s mortgage finance specialist. Robert’s areas of expertise are Offshore mortgages, International mortgages, High value mortgages and international protection.

We welcome Robert to the firm and look forward to an exciting future together.

Yellow management

Very happy to announce that Yellow Capital has appointed Mr Peter Drew as Business Development Manager and Mrs Tuija Takieddine as a Senior Consultant this week. A big thank you to Paul Rodker our practice manager for all the work done to get the appointments done.
Next week we hopfully see the appointment of Robert, an Offshore Mortgage Specialist and Eileen a paraplanner and administrator.

Good work team.

http://www.telegraph.co.uk/finance/economics/9756761/Fitch-expects-Bond-Bubble-carnage-when-rate-cycle-turns.html

Please follow the link.

http://www.stepjournal.org/journal_archive/2011/step_journal_april_2011/more_about_gold.aspx

Click the image above to download the document as a PDF.

 6 November 2012

 IFA Centre has today launched a directory of its members, to help consumers find Independent financial advisers across the UK. 

“Search engines are increasingly including firms and advisers who will be offering Restricted advice.  Consumers benefit from Independent, unbiased and unrestricted advice.  It is therefore important for them to find Independent advisers, especially when so many commentators give the impression that Independent advisers will be rarer than hen’s teeth.”

In spite of Google searches bringing up links which describe finding an IFA, the actual websites frequently include Restricted firms or advisers because they are based on qualifications or accreditations, or simply FSA authorisation.  Firms are being invited to populate their own individual page with information useful to clients looking for an adviser.    

Gill added : “IFA Centre is not agnostic. I am not and my members are not.  We know consumers value Independence and it is important for them to be able to find advisers will will provide them with Independent advice.

“The last few months have made clear that organisations dependent on provider funding are turning away from their commitment to Independence.  We have no such conflicts and our members value our total commitment to representing and supporting Independent firms and their advisers.”

Study of business cycles must be based upon a satisfactory cycle theory. Gazing at sheaves of statistics without “prejudgment” is futile. A cycle takes place in the economic world, and therefore a usable cycle theory must be integrated with general economic theory. And yet, remarkably, such integration, even attempted integration, is the exception, not the rule. Economics, in the last two decades, has fissured badly into a host of airtight compartments — each sphere hardly related to the others. Only in the theories of Schumpeter and Mises has cycle theory been integrated into general economics.[1]

The bulk of cycle specialists, who spurn any systematic integration as impossibly deductive and overly simplified, are thereby (wittingly or unwittingly) rejecting economics itself. For if one may forge a theory of the cycle with little or no relation to general economics, then general economics must be incorrect, failing as it does to account for such a vital economic phenomenon. For institutionalists — the pure data collectors — if not for others, this is a welcome conclusion. Even institutionalists, however, must use theory sometimes, in analysis and recommendation; in fact, they end by using a concoction of ad hoc hunches, insights, etc., plucked unsystematically from various theoretical gardens. Few, if any, economists have realized that the Mises theory of the trade cycle is not just another theory: that, in fact, it meshes closely with a general theory of the economic system.[2] The Mises theory is, in fact, the economic analysis of the necessary consequences of intervention in the free market by bank credit expansion. Followers of the Misesian theory have often displayed excessive modesty in pressing its claims; they have widely protested that the theory is “only one of many possible explanations of business cycles,” and that each cycle may fit a different causal theory. In this, as in so many other realms, eclecticism is misplaced. Since the Mises theory is the only one that stems from a general economic theory, it is the only one that can provide a correct explanation. Unless we are prepared to abandon general theory, we must reject all proposed explanations that do not mesh with general economics.

— READ MORE

Well done! Yellow Capital will officially become ISO 22222 certified after rigous systems audit.