January 2015 - HBFS

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Fourth Quarter 2014

Posted by | Investments, Pensions | No Comments

Well the final 3 months of the year proved to be very trying times indeed, causing a few sleepless nights, the FTSE 100 was bouncing around like nobody’s business, with huge drops one day and dramatic climbs back up a day or two later. Immediately we launched into this third quarter the FTSE 100 went into a downward spiral, dropping -5.51% in the first 16 days, rising +5.66% by the end of October. November, thankfully was somewhat flatter and calmer rising steadily by 1.68%. December however, started off aggressively falling by -7.12% by the 15th December, regaining +6.2% before year end.

What did World Markets do in 2014?

p4chart

A mixed bag as you can see above, the real surprise, Japan! This positive return was only copied by a very few of the sectors fund managers.
With regard to India, this huge return was mainly due to the election of the new Prime Minister Narendra Modi. You may remember we commented on the potential for super returns in our post early May. These returns came through for our investors in this volatile region.
After many years of steering clear of the USA our choice of a few years ago to reinvest in the USA really paid off, with investors reaping the benefits.
Thankfully the UK equity funds that we were positioned in for 2014 fared very well and produced solid positive returns, busting the argument for passive index trackers and ETFS. So we were delighted with this result.
Latin America, however, became our thorn in the side, with continuing negative returns, I did read an excellent article to look at Latin America as a contrarian view and invest. I’m afraid that at this point I am not totally convinced.

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