Arch talk.

Today’s video talks about lockdown rebalancing client we help and book of the week
Today’s video talks about lockdown rebalancing clients we help and book of the week !

Hi and welcome to today’s Arch Capital update. Now, for all those in lockdown I hope you’re okay, it’s obviously frustrating again, I really do hope you’re all okay. Of course, reach out, we’re here working. The team are working at home, some are spending the odd day in the office rotating around. So, if you have any questions, we’re all here. It’s business as usual for us and we do hope you’re all okay. Let’s hope we all get out of this in a few weeks. One thing’s for sure is that I’m not a very good teacher while trying to work at the same time. That doesn’t work too well for my year four students, I lost control, very quickly, of the classroom, so full respect to teachers.

I just wanted to talk first about where we are in the markets and the need to rebalance. If we look at markets over time, here’s a simplistic chart, unfortunately markets just don’t go in a straight line. We know that growth markets do increase over time – that’s a capitalist system working for all investors – but unfortunately, as we all know, our returns are wobbly and they’re up and down. You might get a big down like last year and a big up; and then the big question is: where does that go? Where are we now? Are we at the top, are we at the bottom? We really don’t know. We know the markets will eventually go higher but we don’t know exactly what this point is. Is this the top, is this the bottom? It’s probably not the bottom but again we have to stay invested and the only way to really manage that is to rebalance.

It might seem crazy to go from an asset class like international funds, some of them are up 45/46/47%, back into bonds or cash that are only 2-3%. But that’s part of the disciplined investing because we don’t know exactly what’s around the corner. We know that eventually markets go higher but that’s the only way we can manage that short term risk if you are worried about it. And that just makes sense. It’s what we did last year as well when we were here, remember? We ran the video and said this sounds crazy we’re recommending a rebalance back into these markets when everyone’s saying, “the world’s going to end”, “this could be a five-year depression”, we just went back to our basics and said: look, we should be rebalancing back in a sensible manner. So, if you are worried about markets, if you’re reading things in the papers, do reach out. We’re happy to talk about it, we go back to the fundamentals, we go back to the basics.

So, in our newsletter today we talked a little bit about this last week, we’ve got an article on how we help a lot of women in the client base, who are independent women, whether they’re high-level executives or they’ve been divorced or widowed. We’ve got a lot of clients in that area and are doing a fair bit of research in that space at the moment to understand the market a lot better, to see how we can serve those clients even better. So, we’ll keep you updated on that as we develop those skills.

For the people at home, I have a book of the week, it might be boring for some, but this a book by Malcom Gladwell. He’s written quite a lot of books, this is called ‘The Tipping Point’. I’ve gone back to reread this because, in the world we’re in at the moment, there’s a lot of tipping points going on: social unrest that we’re seeing in some parts of the world, COVID has created a different situation for all of us (life, home, work, travel). It’s quite an interesting read. If you’re interested, I’ll put that on the link as well. So, take care, stay well, please reach out if you’ve got any questions we’re here to help, thanks.


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