I love the annual Fisher Funds roadshow. It’s great getting around the country and chatting to so many of you. This year the messages are not easy. Low-interest rates are challenging all of us. To meet the challenge it is important your investment strategy is match fit for today’s environment and that you take a long-term approach. In our view, what we do as an active manager, seeking to beat the market, has become even more important than ever.
It’s like an early Christmas present for me. The Fisher Funds roadshow. The best time of the year. The roadshow has always been an important part of Fisher Fund’s DNA. The chance to meet with so many of you, to hear the things keeping you awake at night and to share our thoughts with you, is a real privilege.
The key messages in this year’s roadshow are sobering but, in my view, are some of the most important things we have talked about in the fifteen years I have been at Fisher Funds.
Interest rates are falling and have been falling for many years now. Low rates present stern challenges for all of us. It makes it harder to save towards our retirement nest egg and harder to live off that nest egg in our retirement.
To meet the challenge of low rates we need to change both how we build wealth for retirement and how we make our money work harder when we are retired. For almost all of us we need to adopt a longer-term perspective and become investors not savers.
In the roadshow we talk about this highlighting three things that we believe we make a real difference.
Build a match fit investment strategy
Getting the right strategy for today’s low-interest environment is the first step in meeting the challenge. For many clients, this means investing more of your portfolio in growth assets while still acknowledging that a well-managed allocation to fixed income has an important role to play protecting your portfolio when times are tough in markets.
We are also of the view that investors will need to be more dynamic in managing their wealth. That means adjusting your strategy as you reach long term objectives or changing spending or saving as circumstances changes. Working closely with your adviser, we think, is more important than ever.
Develop an investor’s mindset
Investing more in growth assets means your returns will be more variable week by week, month by month but, over time, your returns should be higher.
This variability in returns can be challenging – it’s great when it’s working for you but not so much fun when markets fall.
This is where an investor’s mindset can help. By investor’s mindset, we mean having clear expectations about how the returns on your investments might vary over time. Well informed means well-armed to avoid unpleasant surprises. It is also important to have a clear process for managing our emotions through difficult market environments.
Our match fit investment strategy won’t work if we cash out every time the market falls!
The role of active management
The third step in managing your wealth in a low-interest rate, low return world is active management. Active management is at the heart of what Fisher Funds does as an investor. We seek to handpick individual companies and fixed income investments that will do better than the market average.
We have been successful in doing this for over 21 years. Active management has made a real difference to our clients’ returns and their wealth over that time.
It is, in our view, going to be even more important over the next 21 years.
A low growth, low-interest rate environment invariably means market returns will be lower than they have been. This makes any extra return we can generate through finding the best investment opportunities a bigger part of your overall return. It is going to be important.
The challenging environment makes this a great time to get on the road and talk to a lot of you. Of course, not all of you will be there, so we'll be sharing the content with you later in the month.
Also, if you have any questions about your own investment please phone or email us to talk to one of our advisers. They really are an important part of your team helping to make sure you are investment match fit and that your portfolio is ready to meet tomorrow’s challenges.