Pitcairn Investment Plan Advice for Year Ahead
Ignore the Noise and Stay the Course!
Jenkintown, Pennsylvania (November 26, 2012)
In the wake of the US election and despite continuing financial roil in Europe, families of wealth are advised to “ignore the noise and stay the course” with their long-term investment plans.
That was the advice emanating at the Pitcairn Investment Forum held in Philadelphia for clients and advisors of Pitcairn, one of the world’s leading family offices. “In the short term, the financial markets will be shaky and quite volatile,” said Chief Investment Officer Harold F. “Rick” Pitcairn, “but longer term, our view is optimistic.”
Attendees came from across the US, Europe and Latin America.
Citing today’s never ending 24-hour news cycle that runs the gamut from economics to politics to weather, Pitcairn explained that people are focusing on the noise, which can take investors off the track of their long-term goals. “It is difficult to see the forest through the trees. Realize that you are going to get some of the little things wrong along the way, but that is okay, as long as you get the big things right,” he urged. “Craft a long-term investment strategy for your family and stick to it.”
For 2013, Pitcairn outlined four major recommendations for successful investing:
1. Have a diverse long-term investment plan
2. Go global in all asset classes
3. Stay positioned for asset inflation
4. Ignore individual politics and don’t allow them to dictate your portfolio positioning
Attendees were advised to develop a long-term investment plan that provides a hedge through diversity and reflects the family’s particular goals. It should not be influenced by one’s politics, but rather by sound investment opportunities. Pitcairn stressed the importance of including the global marketplace, pointing out that the evolution and growth of a global consumer class, is undeniable: “Inclusion of global consumption companies, both in the US and abroad, in one’s plan is very important. Protection against the effects of inflation, expected over the longer term, is also necessary in any balanced long-term investment plan,” he added.
While issues in Europe and China continue to dominate the global economic scene – the ongoing debt crises in Europe and the slowing rate of growth in China – other regions continue to offer significant potential. One often-overlooked market is Mexico, where a rapidly growing consumer class is combining with sophisticated manufacturing capabilities and attractive labor costs to be able to advance capital opportunities throughout the Americas.
In the short term, especially during the remainder of 2012, noise about the fiscal cliff will provide enough angst to go around, the Pitcairn Investment Forum participants heard. However, speakers at the Forum generally agreed that they expect some form of fiscal deal to emerge. Until then and for the short run, shakiness and volatility may be the general order of the financial markets.
Pitcairn is one of the world’s leading family offices. Dedicated to helping families sustain and grow their substantial, often complex financial assets, Pitcairn also supports the unique heritage of its clients across multiple generations. The firm has been recognized as an innovator and global leader in the family office industry since its inception in 1923. Today, Pitcairn continues to redefine the family office experience for generations of the world’s wealthiest families. Headquartered in Jenkintown, Pennsylvania, the firm also has offices in New York and Washington, DC as well as a network of resources around the world.