A Fallen Star: Neil Woodford

It’s with a heavy heart this week that we learned the news of the suspension of the Woodford Equity Income Fund.

Only a few years ago, Neil Woodford was the shining star of the fund management world. If there ever has been a household name in the fund management world, Neil Woodford surely has to be that name.

To give you some background on what’s happened, the Woodford Equity Income Fund has always had a relatively small proportion of its investments in unlisted or smaller companies. Neil Woodford has always maintained that these companies have incredible growth potential.

The problem with unlisted or small companies is that they are hard to value, illiquid and sometimes hard to sell (especially when under duress as is the case now).

In recent years, the performance of the fund has been very disappointing, to the extent where the Woodford Equity Income Fund has been at the bottom of most league tables for at least two years now.

As a result, investors have been withdrawing money at a fairly rapid rate. This all came to a head last week, when Kent County Council requested 250 million pounds back out of the fund.

When a fund manager gets withdrawal requests of this size, they generally have to sell assets in order to meet the redemption. Given the illiquid nature of some of the assets at the bottom of the portfolio, Neil Woodford has been selling the larger and more liquid companies that sit within the fund in order to meet these redemption’s. As a result, the percentage of smaller and unlisted companies within the portfolio has grown over the past 12 months to the point where it’s exceeded the 10% limit imposed by the regulator.

Neil Woodford then listed some of the smaller holdings within the fund on the Guernsey Stock Exchange and has also exchanged some of the smaller assets within the fund for his own Patient Capital Trust shares (this is an investment trust, also run by Neil Woodford, which specialises in smaller company investments). Many commentators have expressed concern over these actions and how legitimate they are.

Even if they do comply with the letter of the law, I am almost certain they don’t comply with the spirit and indeed the regulator is now investigating these Guernsey Stock market listings.

There are lots of lessons to be learned from this debacle.

First of all, I think it highlights the risks involved in self-investing. Most self-investors use the research and recommendation tools from the broker or the platform that they use to purchase investments.

In this particular case, the Woodford Equity Income Fund was heavily, heavily marketed by some of the biggest names in the self-investing (and advisory for that matter) world. Self-investors bought the fund in their droves and while they may have been aware of the poor performance, I would be surprised if many of them had been aware of the developing liquidity problem within the fund.

Although clearly, I have an element of self interest in promoting the value of professional financial advice. I think it is probably fair to say that the vast majority of self-investors do not have access to the level of information required to make an informed judgment on how suitable the Woodford Equity Income Fund was for their needs, especially as time went on.

What started as a traditional large cap UK equity Income Fund, ended up becoming arguably quite a risky small cap speculative investment. Unless you had your eye on the ball, this shift in style and strategy may not have been obvious.

The vast majority of well-run advisory firms I know (ours included) pulled the fund out of most client portfolios a couple of years back. I recall the Buckingham Gate Investment Committee agonising over what, at the time, felt like quite a controversial decision. “Pulling Neil Woodford out of the portfolio just because of 12 months of under-performance, you must be mad” was uttered to me by one interesting individual at an investment seminar!

2 years later that decision looks incredibly sensible, although I don’t profess to have foreseen the liquidity issues ahead of time. Basically, the data was telling us that there were better options out there, so we followed the data. It is as simple as that.

It seems the only organisations that continued to promote the fund, despite what has now been a very extended period of significant under-performance were those who had too much skin in the game or who had some sort of commercial arrangement with the now embattled fund manager.

I think another issue, which becomes clear here is people getting carried away.

I think it’s fair to say that Neil Woodford probably got a bit over excited when it came to re-positioning the portfolio in line with his once-famous conviction. What started as a slight transition towards some of the smaller and more domestically focused stocks (in the belief that they would out-perform after the Brexit uncertainty fades away – a point on which he could still be proved right, if we can ever break the Brexit impasse), turned into a wholesale shift away from the large-cap income stock on which Woodford made his name into medium and smaller companies, many of which the average investor has probably never heard of.

Finally, there is an air of desperation about the actions taken within the fund. As the performance got worse and worse and the losses got deeper and deeper, it seems that more and more risk was taken within the fund in order to try and recover some of those losses. A strategy which has now failed spectacularly.

What happens next is unclear. The fund is now suspended for 28 days and this may be extended. Given the severe outflows from the Woodford funds over the past week (by my count, he has lost in excess of £4bn this week alone) I wouldn’t be surprised if the fund gets merged into a larger UK equity fund or it could even be wound down.

With all of this said though, things might not be quite as bad as they seem!

The UK regulatory system ring-fences client assets and within an open-ended fund, the value investors receive is simply the value of the underlying assets within the fund. Neil Woodford’s demise doesn’t really do much to change that value, to the extent that share prices come under pressure because he is a forced seller.

When it all boils down though, those who will be most impacted by the suspension and the resulting fallout will be those who did not follow the basic rules of investing in the first place.

Have your money in a range of different funds, from different fund managers.

Diversify across sectors, geographies, assets classes and strategies.

Don’t take more risk than you need to.

Continually monitor and review your investments.

These rules have worked for the past couple of hundred years and I suspect they will continue to do so. It is those who don’t follow the rules who get hurt!

Just When You Thought It Was Safe…

Just when you thought it was safe to go back into the water. Donald Trump happened. Again!

The events of the past week or so just go to show how unpredictable markets and investing can be. Up until late last week, things were looking very rosy indeed. The US markets were just within touching distance of their all-time highs, the UK was performing well and most other major stock markets had posted some impressive numbers also.

Economic fundamentals were looking good. 3/4 or so of the S&P 500 companies had posted results exceeding expectations, the US and UK had some record breaking jobs numbers and the US/China trade deal was about to be signed. What could possibly go wrong?

Well… Our good friend Mr Trump is what can and did go wrong, with his surprise increase in tariffs on many Chinese imports.

There is a consensus that the last round of tariffs, broadly set at 10%, were just about manageable for US importers and that they have absorbed this cost rather than pass it on to their customers. A 25% tariff is a very different matter and this could well lead to higher prices for US consumers, which will do nothing to help future economic growth in the worlds largest economy.

What has been especially surprising is the reaction of both the US and Chinese markets to these developments. When Trump tweeted that he was considering increasing tariffs on Chinese imports, both the US and Chinese markets fell sharply. On the day the tariffs actually took effect however the Chinese market went up by 3%.

How does that work? The threat of the action caused a widespread selloff in stock markets across the world, but the action itself seems to have triggered a rally.

I wish I could come up with some logical and intelligent explanation, but sometimes there simply isn’t one. We just have to admit that over the short term markets are totally unpredictable.

The fact of the matter is that although you may have been thinking that it was safe to go back into the water, you never should have got out in the first place!

Reflections on 2018

As 2018 draws to a close, there is a lot to reflect on and consider.

First of all we have the seemingly never ending Brexit discussions and negotiations with the final date for the vote now set for the week of January 11th.

If the vote is ‘no’ as seems to be widely expected, then this opens up another can of worms about the possible options. The BBC produced a very useful decision tree highlighting the possible paths that could be followed after a ‘no’ vote and I think I counted over 20 different combinations when I looked.

On the other hand, if Theresa May is to pull out a surprise ‘yes’ vote, then at least we will have some clarity over the future direction of travel, regardless of your views on the ‘deal’ itself.

It is important to bear in mind that Brexit is very much a UK issue. Markets elsewhere in the world do not seem phased by Brexit or the surrounding game of politics. They have other things on their minds. Talking to an Austrian chap at a recent business coaching event, it was interesting to hear how they see Brexit. Most Austrians, he informed me, simply think we are mad for having initiated the whole process in the first place. Given the resulting chaos – perhaps they are right!

Elsewhere there have been plenty of goings on to keep people occupied and despite the fact that we can’t get away from it here in the UK, Brexit is barely mentioned (nor does it need to be) in some of the other global markets such as the US and China.

Although we have seen some market volatility in the latter part of 2018, this is simply a return to ‘normal’ levels which are in contrast to the unusually calm 2017.

We have started to see some minor interest rate hikes across the major western economies. As I have written about before, although this could be a bit painful for markets in the short term, it is a very necessary part of our recovery from the decade-old financial crisis and is (at last) a small sign that things are returning to ‘normal’.

Although I will never try to predict what the following year holds (the last 2 or 3 years have taught us to expect surprises, both political and financial if nothing else) it can often be helpful to review the fundamentals of the global economy. I would encourage you to read this article from 7IM which provides some useful insight on the state of play and a calm, rational analysis of things potentially to come in the future.

Regardless of what is happening out there in the world, we remain long term investors. We don’t try to time the markets and we don’t panic when things seem tough.

As I wish you a very Merry Christmas and a happy 2019, I shall leave you with the words of Warren Buffet – a calming influence when the world seems to be going mad:

‘The most common cause of low prices is pessimism – sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It is optimism that is the enemy of the rational investor.’

 

What Is The Money For?

I attended a seminar recently and a very interesting question was posed for suggested inclusion in client meetings and in questionnaires. It was simply “what is the money actually for?”

A simple enough question, but one which I suspect many people may not have a simple answer to.

Money is a strange thing and it makes us behave in very peculiar ways.

It is also a very emotional thing, despite the fact that human emotion (generally speaking) leads to poor financial decision making.

You see, we often meet people who have accumulated very significant wealth. I do wonder however if people really know what the money is for.

Very often we meet people who are still working in jobs they dislike because ‘they need to’.

When we look at the numbers however we often get a different story. On occasion we find people have actually worked for too long. This is fine if you love your job, but how would you feel if you worked for 3 years longer than you needed to in a job you hated?

When we ask what the money is for, many people will say financial security, despite the fact that they don’t really have any definition for what ‘financial security’ really means.

While I fully appreciate the benefit of the emotional comfort money can bring (in fact, I did my masters dissertation on this very subject), I fear that just saying ‘financial security’ is a very easy way to avoid doing some of the thinking to truly define what is required to achieve this fabled thing called ‘financial security’.

As with the vast majority of money related goals, it is usually possible to put a number on this. We just have to do the thinking work first. For some people, financial security means having enough money to live on for 6 months – pretty easy to define. Multiply monthly expenses by 6 and there you have it.

For others, financial security might be having enough money to live on for the rest of their lives. A much more complex calculation, but with the right maths, we can still get there. Granted, you would need to build in some assumptions and you would most likely wish to add a large contingency pot on top of the final number, but the point is you still arrive at a number.

When we run the numbers in this way, we often find that people have significantly more than they need for whatever goals that they wish to achieve (financial security included) and so at this point we come back to a slightly re-worded version of the question; ‘what is the excess money actually for?’

My conclusion, is that most people don’t know. They have worked very hard to accumulate a pool of assets, but perhaps not then thought about what to do with any excess funds over and above their own needs.

This is where the conversation often turns to lifetime gifting or philanthropy – two things which have been shown to deliver the very greatest levels of satisfaction, but which people often shy away from out of fear of running out of money.

With the right planning beforehand, this needn’t be a concern and this opens up possibly the greatest and most noble thing any of us can do with our money – help others!

 

A Case In Point

I wrote last week about the market volatility we had seen and the importance of keeping a level head during times like these.

In that post, written in the midst of large market falls, I encouraged investors to keep calm and carry on. I also mentioned the potentially damaging effects of missing just the best 10 days of market growth within a 15 year period.

Although last week ended at a low ebb for the markets, things quickly started to recover on Monday and have continued to do so this week.

For those people who think that they can time the market, they would have needed to correctly predict on Tuesday the circa 7% falls that would transpire on Wednesday and Thursday. I have seen no evidence anywhere online of anyone making those kinds of predictions.

They would have also had to be brave enough to go back in late on Friday, just in time to catch the gains that have been made this week.

Especially when looking at the US market, I suspect history will confirm that some of the days this week will feature in the ‘top 10’ days list in years to come. If you are out of the market even for just these few days, you risk cutting your total return in half.

Unless you have a crystal ball, I would contend that no one would have made the decisions required to prosper in the markets over the past 10 days.

This leave us with the only reliable option – to remaining invested throughout. This means we capture all of those best 10 days. Yes, we have to accept some temporary volatility along the way. But that is all that it is – temporary volatility.

Please don’t let something as normal and expected as a bit of market volatility throw your financial plans off course.

Keep Calm & Carry On

Keep Calm & Carry On. Sage advice in times of market stress.

Countless research has shown that missing just the best few days of returns in the market is enough to significantly dent your total investment return.

Research by Fidelity has shown that if you had your money invested in the FTSE All-Share from the end of June 2003 to the end of June 2018 (15 years or approximately 5500 days), you would have earned a very nice 8.9% annualised return. Not too bad by any standards.

If you miss just the best 10 days of performance (out of those 5500) then your total return falls to just 4.6% per annum.

Miss the best 20 days and it falls further still to only 2% per annum.

If you miss the best 40 days of returns (again to stress, out of a total of 5500) then you actually get a negative return of -2% per annum.

The same research has been replicated across many different markets all over the world and the results are very similar.

This shows the importance of remaining invested, even when markets get turbulent.

In this world where investment decisions are made by computers in milliseconds and the distance from the stock exchange determines which trading house wins, anyone who thinks that they can time the markets is either lying, deluded or both.

Research has also shown that so called ‘investment experts’ and analysts have a pretty much exactly 50% chance of success when trying to predict when markets will go up or down. You might as well flip a coin to predict the direction of tomorrows markets, it has as much chance of being right as anyone else out there.

Im pretty sure on Monday of this week no one predicted the falls we have seen on Wednesday and Thursday. If they did I am yet to hear about it.

The point is that markets move very quickly.

If you attempt to time the market, the chance of missing those best 10 days is very high indeed. Markets can and do recover quickly and the biggest gains (i.e. those best 10 or 20 days), tend to follow significant market falls.

We only have to look back as far as February to see a similar phenomenon in action. In the early days of the month, the S&P 500 dropped around 8-9% over just a couple of days. Of course this was widely reported in the media with the usual collection of colourful language such as ‘turmoil’, ‘chaos’, ‘panic’ and, my personal favourite, ‘bloodbath’.

What received almost zero mainstream media coverage was the subsequent recovery. Only weeks later the S&P 500 has recovered the 8-9% it lost and it then went on to break new record highs only a few weeks after that.

Calm seems to have returned this morning on the markets. Could this be the start of the next recovery, or just the eye of the storm?

The truth is that no-one knows, but the time-tested investing adage of ‘time in the market, not timing the markets’ is as valid today as it ever has been.

Keep Calm and Carry On. It’s the only way to invest.

 

 

The New Science Of Spending

In the good old days, retirement was simple.

You worked for 30 years with the same employer, received your gold watch for long service and then retired with a 2/3rds final salary pension – what could be more straight forward!

Nowadays, things are a little more complex.

We don’t tend to work for the same employer. Gone are the days of the final salary pension, leaving individuals to take more responsibility for their own retirement income. This retirement income will often come in many forms. Gone are the days of a single employer final salary pension that was completely automatic (no thought required).

Now we often work for 5 or more employers, collect various personal pension plans, company pensions, ISA’s and other savings vehicles for our retirement.

All of this needs far more management and input than has previously been the case. We no longer have the automated final salary pension where your retirement income was simply dictated by your final salary and length of service.

Now we have decisions on how much to pay in, what investment funds to choose, how much tax free cash to take and so on.

Now, the new auto-enrolment legislation has gone a small way to automating the pension system again, but most people acknowledge that this is just a sticking plaster and much more will need to be done to see the population at large enjoy a prosperous retirement.

The psychological shift

Perhaps the biggest shift (and one that people are yet to fully get their head around) is the psychological shift from an accumulation to a de-cumulation mindset when people retire.

Back in the days of fixed income final salary pensions, you didn’t really have to worry about this. You never accumulated a pot of money in the first place, you simply earned membership in the pension scheme which gave entitlement to an income in retirement.

At retirement that income turned on and you then had a nice monthly deposit into your bank account.

In the new world of pension freedoms, people will spend 20, 30, 40 or dare I say perhaps 50 years accumulating a pot of money. All of a sudden, when they retire, they then need to start de-cumulating (i.e. spending) that money.

The problem is that this is not an easy shift to make

When you have spent a lifetime saving money and building up your nest egg, it can be very distressing to see it start to fall in value.

Various studies have shown that in the investment markets, human beings feel the pain of loss about twice as strongly as the pleasure of gain.

I suspect that the same psychological forces are at work when we start to spend down our nest-egg – it hurts!

This often results in people holding back on their retirement spending plans because they simply don’t want to see the value of their pot fall. But this can lead to some real problems.

Occasionally we meet people who are living on a shoestring, despite having 7 (and sometimes 8) figure retirement portfolios and this is all because they don’t want to see the value of their precious nest egg go down.

But go down it must if we are to enjoy a great retirement – indeed, one must ask the question – if you wont spend the money in retirement, when exactly will you spend it?

 

 

 

Reflecting on the $1 Trillion Company

Lots has been said about the rise of Apple to become the worlds first company to achieve a $1 trillion market capitalisation.

I have 2 interesting observations on this milestone:

 

1 – Is Apple Really The First?

In the strictest sense, this is true, although as with many things, when you dig a little deeper, there is more to the story than meets the eye.

Although Apple, is the first company to reach a $1 trillion valuation in nominal terms, this fascinating article from Time, suggests that there are at least 5 companies in history that would today be worth over $1 trillion if you adjusted for inflation.

In fact, Time suggests that on an inflation-adjusted basis, the largest company that has ever been is the Dutch East India Company, which dates back to the 1600’s, with an inflation adjusted market cap of $8.2 trillion in todays money.

Also of note is the reason for this gargantuan valuation – the Dutch tulip bubble. Many people will be familiar with the Dutch tulip craze, which is the first widely recorded ‘financial bubble’ in history. For some (still unknown reason) people went mad for Dutch tulips in the 1600’s, pushing their prices to completely insane levels.

Until very recently, the Dutch tulip bubble remained the biggest financial bubble in history (when measured by the sharp increase and then even sharper fall in value), although this crown has now been taken by Bitcoin.

Some could draw comparisons with the tech bubble of the early 2000’s, although as I think the world has now realised, technology really is worth a lot and has the power to change the world, unlike Dutch tulips, pretty as they may be.

This is confirmed by the fact that all 5 of the worlds largest companies are now tech giants in the form of Apple, Microsoft, Alphabet (Google), Amazon and Facebook.

 

2 – Do Record Breakers Always Suffer A Fall?

A lot will now be said about the ‘inevitable’ fall of Apple. When a record is broken, we assume that this must be the end of the road.

The same has been said about the stock market over the past 2 years or so. “Now that we have reached a record high, we MUST be due for a crash”.

This is complete nonsense. Records are made to be broken and if the British Olympic teams of recent years have taught us anything, it is that records can be broken again and again by the very same person (read company).

As such, I suggest you also read this article on how Apple could now be on the way to achieve a $2 trillion market cap, before you rush off and sell those shares!

As always, just because a record has been broken, there is nothing to say how long that new record will stand for. In Apple’s case, it only lasted a day or two, as Apple now has a market cap of $1.030 trillion.

The final point of note here, is that $1 trillion is simply a ’round number’ that has significance for us human beings only. Other than being a 1 and 12 zeros, it doesn’t really mean much else in the context of Apple’s rise and rise.

Who knows, perhaps the first $2 trillion company will be here sooner than we think?

 

Why Don’t We Ever Feel Wealthy?

In our seminars I often talk about the fact that no one really ‘feels’ wealthy.

This might strike you as odd, given that we spend our working day looking after people who are generally fairly well off by most standards.

It does seem however, that no matter how much money we have and how rich we appear to others, we don’t ever appear to feel wealthy in ourselves.

If I were to mention that this phenomenon occurs to people with £100,000 in wealth, then perhaps you could understand. Most would agree that £100,000, while a very nice sum indeed, is not enough to live a totally worry free financial life.

But we see this happening to people with over £1,000,000 in liquid wealth (that is excluding property values and other intangibles). Surely when you have £1 million in cold hard cash or investments you can call yourself wealthy?

Based on our experience, apparently not!

We regularly speak to people with £5 million or even £10 million in liquid cash and investments and yet they still do not feel wealthy in themselves.

Why should this be?

I don’t have any scientific evidence on this topic (perhaps this is a subject for my next dissertation?), but I have a few potential reasons why this could be:

  1. There is always someone richer. Whether you have £10 or £10 million, there is always someone richer who lives down the road or whom you know and associate with.

2. Some people don’t feel ‘worthy’. This is especially true when people have perhaps come from a less advantaged background and have made significant wealth with their own hands. In many cases, they don’t feel worthy of this new found wealth or perhaps they feel that they don’t deserve it.

3. I think the main reason though is down to mindset. Some people seem to be natural savers. They feel guilty about making large expenditures and always feel inclined to save as much as they can (even if they already have £10 million).

Other people, are natural spenders – they tend to spend money as they earn it, even if they do earn a lot.

This creates a bit of a problem because savers, generally, will continue to save and feel that they are not ‘allowed’ to spend, even when they have become incredibly wealthy.

Spenders on the other hand, tend not to become so wealthy in the first place.

So what is the solution? Well, as with most things, the middle ground is perhaps the best place to be.

It helps to have made a plan in advance about how much money you actually need to (insert goal here – retire early, but a boat etc). When you have defined the goal in advance you:

A – know when you have achieved the goal – you know when you can ‘stop’ and

B – generally feel less guilty about spending the accumulated money, if there was a specific goal or reason for saving it in the first place.

We call this ‘defining the finish line in advance’.

Much like in a race – you generally know the distance when you start and the type of pace you will need to run to win.

If there were no finish line already defined, how would you know when to stop? How would you know what training and preparation you needed to do?

The same is true with financial planning.

We find the clients who experience the greatest freedom around money are those who have a goal laid out in advance. This way, when they ‘make it’ they know that they have reached their finish line and can give themselves permission to stop (and go and spend some of that hard earned money).

 

 

 

 

Could A Bad Brexit Be A Good Thing?

I was chatting with a client the other day about the potential implications of a hard Brexit, soft Brexit, medium rare Brexit and about any other incarnation of Brexit you can imagine.

Despite all of the white papers and policy discussions, the divisions between the very people supposed to be making the negotiations with the EU suggest that we have a very long way to go before a deal becomes ‘clear’.

Our conversation turned to the timing of investments and specifically, “should I invest money now because a ‘bad Brexit’ (which in the context of the markets is supposedly a hard Bredit) could cause havoc for stock markets”.

As the conversation evolved, I realised that my response to the question was pretty much the same response I give to anyone who is worried about some sort of ‘market event’.

Granted, Brexit might be a fairly major event in the grand scheme of things (or perhaps it wont – we really don’t know), but the principles are still the same.

My response went something like:

  1. There will always, and I mean always, be some sort of potential future event to cause potential upset on the stock market.

Before Brexit we had Trump, before Trump we had a million other things we could have been worrying about.

There will always be a reason not to invest. The human brain loves not making a decision, it loves to procrastinate. The problem is that there is always something on the horizon that could be the next big disaster which gives us a perfect excuse to put off taking action.

After Brexit is complete, there will be something else – mark my words!

  1. Even when these supposedly disastrous events do happen, the effect on the stock market is often negligible or is in fact the complete opposite to what is expected.

Using Trumps election and the Brexit vote as perfect examples, both were predicted to cause financial meltdown and havoc if they became reality and indeed they did, for about 2 days!

After this incredibly short period of time, markets continued their march upwards and have gone on to break records on a seemingly weekly basis ever since.

Had you taken all of your money out of the market on the day before the Brexit vote, when would you have put it back in?

I strongly suspect that you would not have pressed the ‘buy’ button again after those 2 days steep falls and indeed, anecdotally, those who did this are still sitting in cash, waiting for the right moment to invest, having lost out on 20+ per cent growth in the mean time.

  1. Finally, all of the above is trying to predict the future, when I certainly can’t do. If anyone can, please let me know (I think we could make a lot of money together).

As such, making these timing decisions is like flipping a coin – there is no way of know which way things will turn and in the short term markets move in almost random directions.

So … back to the point … what should someone do if they are thinking of investing and they are worried about a big event triggering a crash. Our suggestion here is always the same:

  1. If you are transferring money from one investment to another, then you should do so as quickly as possible and with the minimum time possible out of the market.
  2. If you are investing a significant sum of new cash, it generally makes sense to divide this up into 5 or so tranches and invest the tranches over a period of time. So if you wanted to invest £500,000, perhaps divide this into 5 and invest £100,000 per month over 5 months.

This staggered approach minimises the potential for a big crash to upset your whole investment and in fact it could turn it into an opportunity. Lets say that the market falls 20% after you have invested your first 2 tranches. Well – you can now buy the rest of your investment at a 20% discount on what you paid before – fantastic!

Now of course, this strategy can also work against you – if the marker rises by 20% after 2 tranches, you should have invested the lot on day 1!

But all of this assumes you can predict the future and you can’t. What we achieve by investing over a period of time is that we reduce the risk of buying at a very high or very low point – we average out and in an impossible to predict world, I will take the average every time.