Standard Life Investments says the shape of new return environment should start to emerge this year

22nd January 2013

Standard Life Investments (SLI) is urging investors to take a ten year approach rather than focusing on 'risk off' and 'risk on' in the next 12 months – terms so beloved of rival fund managers. It has set out its ideas in detail in its first global outlook report of 2013.

One point that caught our eye at Mindful Money is the fund manager pointing out that prices for safe haven assets such as government bonds are near 100 year highs which certainly puts into perspective why they may not be sucha good buy in the short term.

Intriguingly, the fund manager also suggests the shape of the new return environment will begin to emerge in 2013. In fact we like these two quotes from the chief executive and the global strategist below.  

SLI chief executive Keith Skeoch says: “It was never a question of simply ‘risk on, risk off’, but more ‘where is risk likely to be rewarded?’ History and common sense suggest that this is unlikely to be the safe haven assets, where prices are still close to 100-year highs. It will take time for the new return environment to emerge. However, we believe there is an increasing probability that it will do so in 2013, with truly sustainable business models and income important elements driving returns.”

Head of global strategy Andrew Milligan says: “It is common place for many investors to make forecasts for stock markets and other asset classes in the coming 12 months. Experience has shown that in most cases such estimates are no better than a random walk. Unexpected shocks can throw markets away from fundamentals. However, there are benefits in examining longer-term, say 5 to 10-year, return numbers.”

This is a long twenty page report which considers the full range of markets and given that SLI is a stock picking fund manager some shares it likes too. So whether you are a long term fund investor or are interested in individual shares it may well be worth a read. The link to the pdf is below – 

  http://pdf.standardlifeinvestments.com/exported/pdf/GS_Outlook/GS_Outlook_Q1_13.pdf

 

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