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Out with a bang

So farewell then, Gerrard. As you read this I will have moved on to whatever pastures await me in my semi-retirement. I say semi because I know what tasks might be found for me at home if I do not profess to a continuing interest in the investment world.

After so many years with Gerrard and its predecessor businesses, and more than 43 years in the industry, it is tempting to look back and reflect on the changes that have taken place. It was 20 years ago last week since Big Bang, as the changes to the way in which the City operated became known.

But you will be far more interested in learning what is likely to happen, rather than listening to the meanderings of a City man approaching pensionable age. Still, it is worth remarking on the significant increase in the professionalism of the investment and securities industries, which is due in no small measure to the upheaval kicked off 20 years ago. And alongside greater professionalism has come increased competition.

The degree of choice available to investors is greater than ever. The application of sophisticated information technology has allowed the development of an array of products that would have been inconceivable a generation ago. But with more complex financial structures, and a vast range of products from which to choose, the role of the adviser has become more difficult.

Presenting a detached and, dare I say it, disinterested view is hard to achieve. When, during the technology boom of the late 1990s Tony Dye pronounced the market too high, his reward was client defections rather than congratulations on what turned out to be a prescient observation. In other words, it can be hard for anyone still working in the investment industry to accentuate the negative.

Whether operating in a more detached environment will make me a better commentator remains to be seen. Looking back at recent predictions, I can be accused of being too cautious. While not calling the start of a new bear market, I was preaching asset diversification and de-risking portfolios. In this I am unrepentant. The future is never as clear as some commentators would have you believe and guarding against the unexpected should be the duty of every prudent adviser.

There are always dark clouds on the horizon if you look through the euphoria that inevitably accompanies rising markets. Among the clouds at present are higher interest rates and rising inflation. Moreover, with GDP growth ahead of expectations, house prices still rising and two members of the MPC voting in favour of a rise last time, the Bank of England is likely to opt for an increase before the end of the year. So a careful approach looks sensible. Valuation levels may appear undemanding but slower growth in the US, in particular, might unsettle some investors. Seeking value in equities remains the best approach.

Brian Tora was investment communications director at Gerrard Investment Management Limited.

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