Would you bet against the guru?
With a performance as consistent as Jupiter’s ‘multi-manager-in-chief’ John Chatfeild-Roberts, should advisers be brave enough to bet against him?
Investment Adviser was lucky enough to have been visited by Jupiter’s ‘multi-manager-in-chief’ John Chatfeild-Roberts for a rare video interview last week.
An economics graduate with more than 20 years’ experience in the City, and with a track record of outstanding investment strategy, his views have become hard for investors to ignore.
When the cameras stopped rolling he produced a rare Charles I shilling with jagged edges. The edges of the coin had been clipped by the medieval sovereign, who would have used the silver shavings to produce more coins which were then flooded back into the economy. As the amount of currency in circulation rose, and as coins in circulation contained less silver, the value of coins would fall – reducing the wealth of those who had money, but also reducing the debt burden of those who owed it. Prices would rise as a consequence. This, Mr Chatfeild-Roberts points out, was an early form of quantitative easing (QE).
But while QE is very old – state-sponsored coin clipping dates back at least to late Roman times – efforts to boost asset prices are now happening on a biblical scale.
Even Mr Chatfeild-Roberts admits he cannot predict the result of today’s QE. Will prices hyperinflate when economic recovery finally becomes entrenched? Will governments be forced to do a monetary easing U-turn – sending asset prices plunging to new lows?
As far as investors are concerned, Mr Chatfeild-Roberts’ quantitative unease is a sign that we must defend ourselves against the possible outcomes. He says equities – particularly those with sustainable dividends – will reward investors over the next five years, particularly if inflation does rear its head. He says emerging market bonds denominated in dollars are also appealing. He is certain that many government bonds – particularly the ‘safe haven’ set of US, UK and Germany – are too expensive.
In some respects, Mr Chatfeild-Roberts’ views make for uncomfortable listening: they run counter to investors’ thirst for safety. But with performance as consistent as his, should advisers be brave enough to bet against him?
John Kenchington is news editor at Investment Adviser