Three men of a certain age (my age) met on the golf course…

Three men of a certain age (my age) met on the golf course. The first said “It’s windy today”, the second said “No, it’s Thursday”, and the third said, “So am I, let’s go to the pub!”

The above is a situation that can occur when deafness starts to impair our hearing. In this case, for the point of the article, it is an innocent example – a little like the game of Chinese whispers that one played as a child.

There is however the story from the First World War where a message was sent back from the front line saying “send reinforcements I am going to advance”. This arrived back at headquarters as “send three and four pence I am going to a dance”. The request was not acted upon and as a result many British soldiers are said to have lost their lives.

Current social media and irresponsible reporting of financial and political events definitely falls into the category of destructive Chinese whispers. In today’s world, who and what to believe is worthy of a University degree course in its own right. Mr Trump’s taking America towards isolation, North and South Korea doing the chicken dance, China heading up massive infrastructure projects both at home and in Asia and Africa, Italy finely balanced on the edge of bankruptcy and the UK and the EU with their Brexit problems. You can find good and bad news in all of these events, but who in their right mind would try to predict which will, and won’t occur, and what the knock on effect might be for your investments.

All of you that have read my previous emails will know that on a personal level I now hold a significant percentage of my investment in cash and I do not see that changing in the near future. I have however taken heart from the recent performance of the U.K. sectors as shown in our Saltydog numbers. They have been unloved and neglected for quite a long time, but have perked up in the last month. I have therefore taken a small holding in both UK small companies and UK income funds that have their investments in the UK and are not too exposed to the movement of the US dollar. Let’s hope that this does not turn into the kiss of death!

One of the oldest stock market adages that is frequently quoted is “Sell in May and go away”. This was usually associated with wealthy investors and stock-brokers who left their offices to head out of the country to warmer climes to spend and enjoy their “ill-gotten” gains. Their absence left the markets on hold until they returned in the autumn. We now live in modern times of computers and easy communication so whether this is still true must be debatable and I would not like to bet on which way this particular mop flops. Certainly in recent years we have seen substantial rises at this time of year and of course some falls. This year it may be good advice to be out of the market, and by the autumn funds may have become less volatile and also a lot cheaper.

I am now looking for that fund that will allow me to place a small amount of “blue sky” money into cryptocurrency and also blockchain technology. It must be a fund in order to spread the risk, as I fail to understand sufficiently the detail of each to make a singular company investment and I would be happy to rely on a fund manager and his team. So far I have only come up with the ETF “First Trust Index Innovation, Transaction and Process”. Before I invest I would be very interested to hear if anybody has found alternative funds.

Best wishes and good investing,
Douglas.
Founder & Chairman