Yes, 2005 had not been a bad year at all. For the third year running, equity markets had delivered a positive return. Even bond markets had not proved a bad place to invest and there was still a healthy appetite for fixed-income funds among retail investors. The fact that they had started to return to equity markets late in the year was typical. Trust Joe Public to get in at the end of a rally.But, then again, it might not be the end. A number of positive signs for markets remained. The FTSE 100 index was increasingly driven by companies where the price of commodities sits as the principal engine behind performance and commodity prices still seemed to be on the up. As for property, the chairman could see boom times ahead for its new property fund now that the residential option was denied Sipp investors. What a turn-round, he thought. If he had behaved in that fashion, his shareholders would be demanding his head. As it was, the man responsible had aspirations to be the next leader of the country. If the investment world appeared complex, it must seem positively straight-forward compared with the world of politics. But perhaps the best thing had been the resurgence of the investment boutique. With the purchase of investment funds increas-ingly dominated by professional fundpickers, the ability to demonstrate a style and perfor-mance that singled you out from the quasi-index trackers had become crucial in winning new business. Private investors still counted but not in quite the way as in the past. Would the year ahead treat his part of the investment world as favourably, he wondered. There seemed no reason to believe that Armageddon lay just around the corner. True, operational gearing was high in this business but the use of quantitative screening techniques had cut down his need to employ expensive analysts while the support they gave to the fund management team meant their ability to take on more funds to look after had improved immeasurably. You could see the effect this had by the empty desks scattered around the room. Sad but profitable. Time to plan for the year ahead, he thought. What else needed to be put in place to mop up that personal pension money that had been earmarked for holiday homes or buy to let and what about a new income fund – perhaps emulating some of the new launches that targeted overseas markets? He had no doubt the ideas would come. They had to. Better times may have returned but competition was increasing. Worse, he had a sneaking feeling that the cost of delivering an appropriate investment product could become an issue – if not this year, then later, as the implications of single-digit returns started to bite. There is no God-given right to win new funds under management, he mused. Time to chair his monthly strategy meeting and determine where the real effort should be placed. The markets that supplied the winners next year would be, like as not, very different from this year’s stars. Thank heavens for the vagaries of market performance.