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Change of style

My annual pilgrimage to the West Country was a somewhat muted event on this occasion. True, it was as enjoyable as usual. The weather was kind(ish) and the turnout for the seminar at the splendidly sited Carlyon Bay hotel, if a little down on previous years, included a top line-up of local advisers. But I had to come clean, you see. It is possible that 2006 would be the last year in which I endeavoured to give the good folk of Devon and Cornwall the City’s view on what was likely to happen to markets.

After nearly 16 years in Gerrard and its predecessor businesses and more than 43 years in the world of investment management and stockbroking, the time has come to indulge myself in a lifestyle change. At the end of this month, I will be retiring from full-time employment. Not retiring totally, you understand, but giving up the day job, so to speak. A portfolio existence beckons, which should, editors’ willing, still allow me to share my thoughts on a regular basis with those of you interested in investment matters.

Having delivered a tried and tested formula on how we manage Sipp portfolios and why the investment road map looked so different these days, it was time for me to move on to the outlook for markets. In truth, it felt an easy subject to tackle. Shares had been enjoying a mid-autumn rally on both sides of the Atlantic. The S&P 500 and the FTSE 100 indices may have fallen short of the levels of six or so years ago but both the Dow Jones Industrial Average and the FTSE 250 were in uncharted waters. Investors had every right to feel that little bit more confident.

The mood in that room was upbeat. Despite higher interest rates, there was no sense of gloom that somehow a crunch was around the corner. People were feeling wealthier. Clients were taking advice. Advisers appeared as busy as I have ever known them.

The enormous growth in the use of structured products was clearly leaving some advisers behind. That a demand for them existed was made clear by their widening remit. Once considered merely a means of accessing a stockmarket by gearing the return available or limiting the downside risk, these vehicles can now be utilised to gain exposure to property, commodities or even individual shares. And if you have enough money at your disposal, you can demand a product tailored to your precise requirements.

With some of those present still alert to the damage caused by so-called precipice bonds, I am not sure that the message got through. As for what we might expect from markets in the weeks and months ahead, that almost felt irrelevant, given all the other useful information being dished out. I re-affirmed a case for equities but sounded warning signals over inflation and interest rates. With the corporate earnings reporting season only just beginning in America, it would be a brave man who stuck his neck out too far at this juncture.

Brian Tora is investment communications director at Gerrard Investment Management

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