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Just asking: what does the new decade hold for investors?

Some of you will know that I’ve acted as an expert witness in legal disputes involving pensions over the last 30 or so years.

Answering questions in this environment can be character-building, to say the least, but I like the work for its problem-solving dimension.

I held this thought as I found myself, for once, asking, rather than responding to, the questions at one of our regular company get-togethers; a chance for colleagues across our business to find out a bit more about their neighbouring companies.

This time, I was “interviewing” Tom Becket, Punter Southall Wealth’s chief investment officer, in front of a tough audience: our colleagues.

Those of you who know Tom or read his blogs will know that he’s not only far more prolific than me but, as his media profile testifies, widely respected for his investment views and approach.

The new decade

The new decade we find ourselves in, he says, will be more unpredictable than the last ten years (a continuous bull market) but one that still offers opportunities for investors who want to take a sceptical but, above all, pragmatic approach.

And while the apparent dominance of passive investing might seem all-pervasive, he posed the question that the world economy could be at an inflection point where algorithm-driven asset bubbles do not reveal the whole story for long-term investors. 

This is where his active, informed process would offer a clearer way forward.

Interest rates may never actually recover to what’s considered to be business as usual, the world’s ageing population and flagging productivity were all factors to consider.

Tom also expressed surprise that markets had not responded to the emerging coronavirus, arguing that, unlike the SARS virus in 2002, China was now a much bigger presence in the global economy.

As he carries out his own research on the ground, his contacts in China and, in particular, Hong Kong, were incredulous at what, in their view, was complacency outside the East to the potential, wider economic impact.

Cause for optimism

Any investment professional has to consider the downside (actuaries certainly have to) but that’s not to say there isn’t cause for optimism ahead, too.

State backing of green technologies and environmental transformation has reached the point where funds - with the best managers unearthing the best opportunities - to help raise the capital to do so are investable. 

Not only that but, politics aside, Brexit will also be positive for the British economy. Our rule of law and continuing desire to carry out business will be recognised by global players who want to do just that. We’ll be seen as a “safe haven”, he ventured.

To be ready for the changes in the 2020s, Tom looked to John Templeton for inspiration: “If you want to stand out from the crowd, you have to do something different from the crowd.”

This maxim has been one of our guiding principles over the last three-and-a-bit decades and will be just as valid in the coming years.

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“If you want to stand out from the crowd, you have to do something different from the crowd.”

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After 40 years of experience in the pensions world, I'm sharing my insights.