Quarterly Review

Planning for Change keeps the course consistent.

David Wheildon / November 2019

Whilst much seems in political limbo, the markets have been comparatively stable throughout. One thing is certain, believes David Wheildon, some significant changes to business as usual are going to unfold in the coming years. Designing responses around this expectation will keep us on an even keel.

I have just finished re-reading last November’s Quarterly Report when I suggested that matters “…will probably lead to a vote of no confidence in the current Government which will then likely trigger a General Election…”. The feeling of déjà vu is extremely strong and it feels as if some of the politicians are never going to give EU up. A General Election is now (13 months after first predicting it) looking very likely indeed and if the politicians go about canvassing votes in the right way it might just break the deadlock. However, that is down to all of us and how we vote.

There are two notes of caution: firstly, the Election may not solve anything if it doesn’t result in a majority Government and, secondly, it may not be the only Election we have in the next 12 months or so!

Despite all our turmoil and political stagnation the UK market has been reasonably settled and Sterling is, very quietly, appreciating against the Dollar and Euro. It’s still weaker than we would like it to be but there has been a significant improvement over the last few weeks. What’s particularly pleasing is that the appreciation of Sterling has not resulted in a drop in the UK stock market – rather, it has remained in reasonable shape.




On a wider scale, we see general global economic conditions continuing much as they have done for the past months. There is a gentle slowing of the rate of growth of the major economies, which markets have now come to terms with. They were very concerned last December and fell on the back of their worries only to recover in the first quarter of 2019 and are now comfortably over their “wobble”.

We mustn’t let the media overblow a slowing of the global economy, as it’s still growing at a reasonable rate, just not quite as fast as it was. In no sense is it contracting or the rate of growth negligible, so although we would like an ever stronger growing economic world, this simply just isn’t possible. The good news is that we don’t see any major financial crises on the horizon and, despite the current and forthcoming political turmoil (remember there is a Presidential Election in America next year), we do expect the global economy to run in decent shape over the coming months.



At times like these it’s important to benefit from the skills of stock picking fund managers as opposed to passive or index funds. There is a strong feeling in economic terms that the world is a changing place. Just because companies may have been in existence for decades they have no more right to survive than new businesses with different working models and practices.

Some commentators are suggesting that we are in the early stages of another industrial revolution, albeit technology driven this time. If you look at the way established businesses such as Thomas Cook, Woolworths, Kodak, Pan-Am and others failed to adapt to the more technology-driven world in which we now live, we can see why they are no longer with us. With the growing clamour for less reliance on fossil fuels because of the changes to our climate, we will see radical differences in our lifestyles and the products we consume over the next 20–30 years. Honda for example will stop selling new petrol or diesel cars in Europe from 2022 -– in only three years’ time!

In this environment of winners and losers it’s vital that your fund managers are able to pick and choose between holdings and that they take far less heed of the past but consider the ever changing business models of today. Firms like Amazon, Purple Bricks, Wayfair, Uber etc are shaking up the old world and redefining how businesses can operate and how we interact with them. We monitor your fund managers extremely closely to ensure that they are abreast of these changes to global businesses and are not swayed to keep with the historic holdings just because they’ve been in situ for some time. Success in investing comes from taking a long term view, but also from not being afraid to keep investing in new ideas, which today are being driven by technology.

There will clearly be a number of twists and turns to come in the UK over the coming months but we feel markets are ready for whatever outcome we are presented with, as finally it does feel that we’re now at the beginning of the end of the Brexit saga. I’m not prepared to say how long the end may take but we are on the last bend heading for the finish line. In the meantime we rely on the stock picking fund managers to work their way through the changing times and continue to keep investing your moneys wisely.


This article is the opinion of David Wheildon