Investment strategist Guy Monson is advising islanders to stick with companies with a strong balance sheet. (Picture by Daniel Guerin, 0550233)
INVESTORS should think globally rather than run for cover in the face of an economic slowdown, according to one expert. Sarasin Bank managing partner and chief investment officer Guy Monson was advising islanders at a seminar.
He said quality global blue-chip equities with the strongest balance sheets were the best course of action at the moment. ‘Falling US house prices have undermined the banking system so expect more interest rate cuts and prepare yourself for the inflation consequences, as experienced in Guernsey already by rising food and energy costs.
‘The solution is not to run to the bank and place everything into deposits and bonds as, by doing this, you might actually do more damage than good. The smartest thing would be to buy into the best global companies at today’s extremely compelling valuations, for their balance sheet strength and their ability to grow dividends in line with inflation.
‘This will protect you from the credit market volatility, but also give you an income stream.’
Mr Monson was speaking before the seminar at the Old Government House Hotel where he talked about the outlook for investment markets for the rest of this year and beyond.
He is a world-renowned authority on the subject and pioneered the use of thematic investment in the management of global equity portfolios.
Mr Monson writes regularly in the international financial press and appears on CNBC, Bloomberg and other financial channels frequently.
‘What I like most about Guernsey is that the professionals don’t take international developments for granted.
‘Because it is an island, it has to roll with the punches. Living in a small island you won’t be able to change the world, but you have to take advantages of changes.
‘The ability to adapt to the international scene without complaining is the secret to Guernsey’s success and that “can do” culture is a perception which penetrates to the City.’
Mr Monson has maintained a focus on the island throughout his career.
His grandmother, Betty Phillips, who is 100 years old, lives here.
Article posted on 18th March, 2008 - 2.30pm
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