Page 27 - DIY Magazine March 2018

So now is the time to take precautions and reduce your exposure to the markets, or you stay invested where you are and see what happens.
You pays your money and takes your choice, quite literally! For myself I would prefer to give up on a gain to avoid a major loss. At the moment I have my life jacket on, but I am not yet in the lifeboat!
In our demonstration portfolios we have reduced our exposure to the equity markets and increased the
level of cash that we are holding. Our Ocean Liner portfolio, which was launched at the end of 2013, is now nearly 50% in cash. Looking to the future when what
IN INVESTING, PATIENCE IS YOUR MOST POWERFUL WEAPON
is going to happen with the markets has happened, I am looking forward to investing into the Age of Magic. Five great revolutions have defined the progress of mankind......The Stone Age..... The Bronze Age.....The Iron Age.....The Industrial Revolution.....And recently The Information Revolution.
Now we have Robotics and Artificial Intelligence which will be the sixth revolution to take mankind forward or to its doom! Perhaps this era would be better named the Age of Magic.
We may not understand how Derren Brown appears to be able to levitate and walk on water, but we do know that it is achieved by misinformation and trickery and so we can rest easy. This is not the case with the advances in technology, such as medicine, robotics,
ALL LOGIC WOULD SEEM TO SAY THAT WE ARE HEADING FOR A PERIOD OF EXTREME VOLATILITY AND POSSIBLY A MAJOR CORRECTION
quantum-computing, nano and artificial intelligence sciences. As these are increasingly more complex, they are rapidly becoming more akin to magic for the bulk
of the population. Technology is developing faster than education can instruct. Those that can keep up, the whizz kids of today, will become the controlling wizards of tomorrow.
I have been struggling to find those companies and funds that are immersed in the ‘magic’ technologies of the future. It turns out that many of these businesses are getting their development and expansion money
by giving up their equity to the likes of FaceBook, Amazon, Alphabet and Microsoft. So by default I am already invested in the ‘magic’ via the technology funds I already hold.
Maybe this new equity ownership will be sufficient to fight off the argument of over-valuation and bubbles in these older established information companies. If there is any truth in that, then perhaps today’s technology funds will continue to deliver the goods.
In the meantime Polar Capital has launched a unit
trust called Polar Capital Automation and Artificial Intelligence, Smith and Williamson have their own fund, Artificial Intelligence, and Picton have Picton Robotics. Apparently these funds aim to hold forty to fifty businesses all directly working in this world of magic. When the markets settle down these will be funds which I will have a close look at for the future.
27 DIY Investor Magazine | Mar 2018