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Issue 46 - Our Travel Plans Update and a Look Ahead to Q4 and What’s in Store!

Travel Plans and Arrangements

Like everyone else, apart from our short business related trip to Portugal back in June, our travel plans have been on hold now for the last 18 months.  Chris and I had an extended trip to the US planned for the Autumn of 2020, which had to be postponed and was rescheduled for this Autumn.  Who would have believed that 18 months after the US closing their borders to travellers from the UK, that they would still remain closed?  Although there has been lots of speculation in recent weeks about when those borders may reopen to the UK and the Schengen countries, there is still nothing in prospect.

However, the current restrictions may it clear that entry will not be permitted if you have. Been in the UK or Schengen countries within the previous 14 days and many people are therefore using a third destination to ‘self-isolate’ to then enable them to enter the US.

Having researched this further, we have decided that we are now going to go ahead with our travel plans, but will amend these slightly such that we will be travelling to Canada on 7th October, where we will spend just over 2 weeks before crossing into the US to pick up the trip that we had planned.

The reason I wanted to let you know this is that we will actually be away from the office for a total of 7 weeks and furthermore, we are going to into voluntary self-isolation for 2 weeks prior to our departure, with a view to minimising further any potential risk of coming into contact with people with Covid.  After such a long postponement, it would be ironic if we were unable to travel due to testing positive ourselves!

As a result of this, I will not be engaging in any face to face meetings after 22nd September until our return, but we are able to continue meetings via Zoom or similar, up until our departure.

I mentioned in a recent News Letter that Nigel King joined us from the beginning of June, and he is a Chartered Financial Planner, who I have to say, is settling down extremely well and he has a very similar approach to client relationships and financial planning advice as myself.  Whilst I am away therefore, if any direct advice or input is needed that cannot be dealt with remotely whilst I am away, Nigel would be able to assist.  As always though, Lesley will be manning the office and therefore, she remains a primary contact for you in the event of any needs that you may have.  She will then be able to determine who is best able to deal with this for you.

Whilst we are travelling, I will also be picking up e-mails and will be staying in regular contact with Lesley and Nigel and I am confident that we will be able to maintain business and service levels as usual throughout.

What’s in Store for Q4?

It really is quite amazing to think that we’re coming towards the end of the third quarter of 2021 and before long, dare I say, we will start to see Christmas appearing in the stores!

When we look back at markets over the last 2 years, we can see that all major markets showed a huge dip in the Spring of 2020 as the world got to grips with the uncertainties of Covid and whilst most major markets have fully recovered, both since then and indeed, have reinstated value beyond where we were 2 years ago, notable laggards are the FTSE 100 Share Companies in the UK and the Hong Kong market in general.

Hong Kong of course, has a big influence from China, but closer to home, is there a question mark to raise over the UK?  Bearing in mind the 100 Share Index is the 100 largest Companies by capitalisation, this does not necessarily represent the UK market as a whole.  In fact, the All Share Index has shown full recovery over that 2 year period and looking ahead, it really is the smaller Companies where the greater opportunities lie from a UK perspective.

Looking backwards is always the easy part, but where does this take us in the last quarter of this year is a leading question!  On a regular basis, I’m talking to the Fund Managers that we work with to gather their views and the general consensus is that even pre-pandemic, the UK was trading at a discount when compared to global markets and that although opportunities have been slower to materialise through a number of factors including dare I say, Brexit and the pandemic, the belief is that in the UK mid and small capital Company space, there are some phenomenal Companies which are serving both domestic and international business customers.  A further thought is that the UK Government is looking at ways to remove the previous EU barriers to home grown innovation, in its attempt to create ‘a level playing field’, this should help to further stimulate the innovative smaller Companies. 

Whilst all of this sounds very promising, certainly for the UK and indeed, we should see some catch up with the US markets, this is taking the longer term view.  With the latest inflation figures jumping to 3.5% however, and as trading volumes pick up again this Autumn, we will almost inevitably see some volatility come back into the markets through the last quarter of the year.  As an example, the US market has now passed over 200 days since it had a 5% sell off, which is one of the longest in history and keeps getting longer!  Consequently, the likelihood of this happening sooner rather than later is growing, but as always, it’s worth remembering that this type of pull back or correction in markets is entirely normal and indeed, is very much expected.  It is in fact, the sign of a properly functioning market in which arguably, exuberance and fear exist as opposing forces!

Probably one of the main factors to keep an eye on is the way that the Central Banks, in particular the Fed in the US, start to taper or reduce the financial stimulus that they have been pumping into the market and a surprise announcement from the US could indeed trigger some selling off and profit taking.

My view therefore, is that I think the final quarter could be represented by some market volatility, but the fundamentals with many Companies remains sound and with the continuing economic growth and return to work, the medium and longer term remains positive.

Whilst these thoughts might prompt the question in some people’s mind, is it worth stepping out of the market if we’re expecting volatility until things settle down, but conventional wisdom says this is not a strategy that will work and in fact to quote Warren Buffet, who is a well known investor and philanthropist and currently is Chairman and CEO of Berkshire Hathaway ‘the only value of stock forecasters, is to make fortune tellers look good’ – he went on to say that the short term direction of stock process is close to random because that is largely down to human psychology and the relationship between markets and volatility.  He said that time in the markets, always beats trying to time the market every time.

I hope that you will find these thoughts useful and as always, if you have any questions, I would be pleased to hear from you.

Take care and we will be in touch.

Best wishes.

Richard, Chris Lesley and Nigel

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