23rd July 2008
Trustnet: Predicting inflation's end; IMA Balanced Managed
Warren Buffett's comments on the twin states of fear and greed sum up the feelings of many attempting to steer a path through the current economic climate. The problem is that fear and greed cause people to stop thinking rationally.
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As global markets have declined over the year, a noticeable allocation shift has been witnessed between funds, with the better performers possessing higher weightings of cash and fixed income securities.
With the sector average currently holding over 20% of these combined asset classes, the shift has not been shocking given the mounting fears of an expected global recession. These fears have pushed many fund managers to go for these ‘safer’ cash equivalents and fixed income securities, in hopes of capital preservation
It is interesting to note that some fund managers, including Richard Branson’s Virgin group, are already calling the bottom of the market in effect, by launching ‘bottom feeder’ funds intended to snap up downvalued assets in the battered aviation, leisure and US residential property sectors.
In the meantime, investors looking to repair their portfolios, or those prescient enough to have switched into lacklustre cash instruments, could do worse than to consider alternative asset classes.
Users of Trustnet.com can now see at a glance which funds can be bought via the 'buy' button found on fund factsheets.
The facility is currently supported by a number of platforms: Fidelity, Cofunds, Skandia, Barclays and The Share Centre
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