Sound investment requires a combination of qualities – some of which are symbiotic. Humility, a much underestimated quality, helps us to understand it is better to remain invested than to try to time the markets because few can accurately predict the future, while it also allows us to better recognise when we have been wrong and to move on. Yet conviction is also required to commit to an overarching investment policy, otherwise portfolios can be unduly buffeted and influenced by prevailing winds, and to support contrarian opportunities when sentiment trails the fundamentals.
Long-term focus
While the nine real investment trust portfolios managed in real time on the website www.johnbaronportfolios.co.uk, including the two covered in this column, pursue a wide range of investment remits and income objectives, their underlying investment policy is to invest in entrepreneurial companies that have the potential to grow faster than the market over time. For the reasons most recently highlighted in the column ‘Remaining focused on the long-term’ (7 August 2020), the portfolios continue to favour ‘growth’ over ‘value’ and tend to be overweight smaller companies both at home and abroad.