Investment Horizons 4 – Seeking better outcomes
Investors are always seeking to predict and, if possible, control the outcome of their efforts. In this edition of Investment Horizons, our regular look at institutional investment themes, we have therefore chosen a number of subjects that can help investors in one way or another narrow the range of surprises that they can expect.
One outcome that is all-too predictable is death. Luckily the time before many of us need to face the Grim Reaper is increasing. But while it’s clearly good news that people are living longer, it is also putting insupportable strains on pensions at a time when people are not saving enough. This is shifting the emphasis toward investment solutions that can help bridge the gap in retirement incomes. Following a major study of post-retirement approaches round the world, we think we can present a robust investment solution to this problem.
Any investment approach designed for pensioners needs to emphasise risk control. One of the biggest sources of risk is the economic environment, which is why we are directing substantial efforts at how we can adapt risk-controlled growth portfolios to withstand different economic circumstances better. And, of course, one of the worst of those circumstances is hyperinflation. Such an outcome may seem unlikely just now, but it is the “black swans” that wreak the worst damage. So our third article looks at whether and how inflation could take off from here.
An even worse outcome for us all will be if climate change pans out as some scientists expect. To date, analysis of the economic impact has been thin on the ground, something we have tried to correct with our investigation of the costs of climate change and where they are likely to fall.
Finally, no financial outcome can be assured if investors cannot buy and sell investments when they need to. Our last article sounds a warning that there are worrying signs that liquidity may be tightening to alarming levels in some areas of the fi xed income market.
Whatever your area of interest, we hope you find something to stimulate you in these pages. As always, please get in touch with us if there is anything you would like to discuss further.