A financial ‘telescope’ is the best way to plot your course

Saltydog looks at the best ways to steady your ship during stormy financial waters

LAST UPDATED: 2 Sep, 2015 @ 17:33
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SALTY-DOG-Tugboat-2-year-performanceIT is essential to have up-to-date unit trust fund performance information. At Saltydog Investor, we pay to receive Morningstar fund numbers on a daily basis.

Our algorithms then align these thousands and thousands of funds into the 30 or so Investment Association (IA) asset sectors.

And then these sectors are allocated into our five Saltydog volatility groups to make them easier to review.

With a nod to my early life in the Merchant Navy, these Groups have been given nautical names that instantly indicate the risk levels associated with the group. In order of rising volatility these groups are named….

Safe Haven – cash and cash equivalent funds.

Slow Ahead – mainly fixed interest funds represented by Bonds and Gilts.

Steady As She Goes – predominantly equity income and managed funds.

Full Steam Ahead Developed – funds investing in small or large companies in the Developed Nations.

Full Steam Ahead Emerging and Specialist – funds investing in small or large companies in the Emerging Nations, and funds from the specialist sector such as Latin America, Russia, India and Biotechnology.

Using these groups we form a risk pie-chart and allocate percentages for investment, based upon our risk appetite and modified to reflect the current market conditions.

This done, the algorithm top-slices the funds so that we are only looking at the top performers on the basis of a four-week and 26-week timescale.

These are the ‘race winners’.

This would be an impossible task for an individual to take upon themselves, both from the point of cost and time. But this is the service that Saltydog supplies on a weekly basis to help you sail through smoother waters.

Speaking of storms, 50 years ago, I was the navigator on a Jamaican banana boat plying between London and Kingston, Jamaica.

It was hurricane season and if we were unlucky enough to be caught out by a tropical storm, the most important thing was to have accurate information on the storm’s size, speed and direction. This was supplied to us by the brave men of the American coastguard, who flew their planes into the eye of the storm and kept us informed of its progress.

Armed with this information, we would then alter direction, slow down, even turn around and do anything within our powers to keep the ship in the South-west quadrant of the storm.

This is the safest sector, as the hurricane should in theory move off to the North leaving us safe to continue to our destination.

I learnt many life lessons in the Merchant Navy and the importance of good information was one of the most valuable in later life. It has certainly kept us safe over the last few weeks, months and years.

Saltydog’s service cannot be compared with that supplied by those amazing airmen from the US coastguard but we are providing a similar facility for those people investing in today’s volatile markets.



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