Stokes says that the principles of investing in real assets have disappeared in favour of the likes of ‘multi-strategy’ portfolios.
He says: “Today, a number of investors with structured products or Exchange Traded Funds have found to their cost that their investment has all but disappeared.
“Older School investors such as ourselves, who as individuals have been in the industry some 30 years or more, do use new financial instruments but in a limited way as we have always felt understanding risk and your potential downside is the best way of preserving clients capital.”
Stokes says that it is this approach that has led to his firm avoiding these ‘instruments of mass destruction’ such as Barlow Clowes gilt plans, split-cap investment trusts, TMT stocks and now hedge funds that lack transparency.
He says: “We all have a responsibility to our clients and investors, and a major part of that is always understanding fully what we are buying.”