I guess in our lives we live and learn. Failure, or at least adversity is an essential ingredient in learning and progress, and has to be accepted. Whether this is experienced in one’s own life, that of a business or a country, it must be discussed and addressed when experienced. It is also common cause that younger people are more tolerant of risk, versus older folk being far less inclined to take the same risks. Clearly, if you have much less to lose, it is easier to bet the farm! Look no further than Bitcoin and other Crypto and Gen-Z investments. I think I would be more right than wrong in suggesting those under 30 are way more informed about Crypto, Wallets and Blockchain and probably ten times more likely to have opened an account (wallet) and traded in these. Some have made a small fortune; others only tell tales of woe. Either way, something real is behind these, it just sounded and still sounds “too good to be true”. By the way, do you remember your folks saying this to you some years back?

Being a naysayer is tricky. If you wait long enough an event will take place which helps you validate your cautious approach. However, during these big changes, some really important and material events do take place, changing the landscape and resulting in significant wealth creation or improvements in wellbeing, health, communications and more.

Thinking back about examples of failure to see the future and adapting reveals some global brands which are now dinosaurs. I suppose Kodak is a classic example. Smartphones, electronic evolution and the changing needs of consumers were ignored at their peril. Watches are another excellent example of this as these once one-dimensional instruments have become extensions of mobile phones, banking, music and much more.

In investment markets, we follow products, institutions and laws closely. NFB considers many different iterations, providers and ideas constantly. We also use NFB Asset Management as a focused expert to research propositions prior to use. In a recent editorial I mentioned Structured Notes. I would encourage readers to discuss these investments with your advisors as they come in different shapes, with different underlying investment themes. Some of these suit quite cautious investors, others better suit more growth-oriented portfolios, both with a local as well as offshore bias. The local offering is particularly interesting at present given these rely to some extent on a guarantee, typically underpinned by a 3,5-to-5-year bond. Rates being unusually high (to counter high global inflation) offers an advantage to local Structured Notes.

As I always opine, these aren’t for every portfolio. This requires careful consideration and a discussion with your NFB advisor is recommended.

Often called “alternative Investments”, Hedge Funds are another example of a very handy addition to portfolios in certain circumstances. There are a few Hedge Fund businesses with which NFB has long standing relationships.  Although never offered broadly to our clients, we have done due diligence on their funds and have very selectively added them to more aggressive mandates. I have personally invested funds as well. Whilst their management fees are unusual (mine are just the same as our clients’) the results over longer periods have been excellent, nett of fees.

This sector of the market is now receiving a lot of our attention as we believe the sector, having been regulated is mature and warrants inclusion in the narrative.

Once again, Hedge Funds will not simply appear in portfolios. NFB is accountable for all client portfolios under our management. We will manage qualifying funds, amounts investible and clients who qualify for consideration. Please reach out if this interests you.

In conclusion, whilst the world and its economies are very topsy turvy, we continue to apply diligence and caution in managing funds. Bad times are followed by good. In most instances, staying the chase makes sense.

Should you feel vulnerable or worried about your portfolio or anything we might be able to help with, please reach out for a coffee or simply a call. We appreciate your custom and notably the referrals of new clients to our team. 


Read more from Mike