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21st Century Investment thinking - a series
We are now in the second decade of the 21st Century and it is clear that the investment world has changed, and will continue to change.
In the late 20th century and into the first decade of the 21st, the perceived wisdom of "portfolio management" was to have about 60 % invested in equities [the stock market] with the balance invested in bonds [government backed and guaranteed investments] for stability.
Of the 60% stock market investment, around 75 % would be invested in "developed markets" [USA, Europe, Japan etc.] with the remainder in "emerging markets" [Brazil, Russia, India, China.
How does this stack up today?
It's clear to most people that the huge fall in world stock markets during 2009 was precipitated by massive debt levels, at every level from personal through corporate to governmental, centered predominantly around the developed markets [USA, Europe etc.].
Since then, these stock markets have recovered well and because of this, many believe we are "out of the woods" - however how much, if any, of this huge debt has been repaid?
We have seen and, are seeing in 2011, the "sovereign debt" issue in Ireland, Portugal and Greece having disastrous effects on the Euro and European markets.
Across the Atlantic, even the "Almighty Dollar" is under pressure as speculation about a possible US bond default, adds to the realisation that the USA is only solvent due to massive loans from China.
The world is a changed and changing place, clearly government bonds are no longer a safe haven and the "developed markets" may have run out of steam.
So where do we turn to both make money and conserve the money we have already made?
Clearly we need to have a different model, and we need to embrace some of the risk/opportunities that all of this change will bring.
A big change since 2009 has been the availabilty to the ordinary investor of "alternative funds" previously only used by the wealthy or the institutions, many uncorrelated to world stock markets.
It's our belief that funds trading in commodities, directly working with both alternative and conventional energy suppliers, directly investing in agriculture, will benefit from the inevitable demand that a rising world population will create, irrespective of what happens to the stock markets.
Commercial property may have had its day, but funds directly investing in agricultural land and specialist high demand housing [student accommodation, care homes etc.] can provide both income and capital growth to a portfolio
Many investors would like to have the security previously available in government bonds and bank investments in their portfolio, but don't really trust in either institution- rightly so!
A combination of Traded Life funds [ trading in the death benefit of senior life policies] , and a whole raft of secure lending funds [lending money on a secure basis to law firms to mount cases, farmers to buy agricultural machinery, even football clubs to buy footballers] can provide the same low volatility and stable returns, banks don't lend money anymore!
We believe a mix of 30% world stockmarkets, 30% commodities/energy/ agriculture/property, and 30% secured lending etc. could be a good "middle road " 21st century approach that we'll be exploring here with you over the next few months. | 
