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Cazenove: Get the inflation debate wrong and you will be 'toast'
Cazenove multimanager Marcus Brookes believes investors must not risk finding themselves on the wrong side of the inflation versus deflation debate.
The raging debate around whether we are likely to have an onset of inflation or deflation will be the main driver of returns over the next five to 10 years, according to Cazenove Capital's multi-manager head Marcus Brookes.
Brookes, who runs Cazenove's £467 million Multi-Manager Diversity and a host of other funds, believes investors need to be more balanced than ever before, otherwise they could be wiped out if they happen to be on the wrong side of this debate.
He said: 'It is going to be the debate that defines the returns for the next three to five, or even 10 years.'
'If you get this one wrong - by putting it all on black, for example - you could be toast. So if you are on the wrong side of the debate you will lose 15% to 20% of your capital in a very short space of time, and let's remembers, if you lose capital it's gone!
In the video, Brookes also outlines why he is increasing the funds' weighting towards Jupiter's Philip Gibbs and Eclectica's Hugh Hendry in such a difficult environment.
3 comments so far. Why not have your say?
Jonathan
Jul 23, 2010 at 14:04
A devalued pound is inflation so more QE would mean higher inflation. Higher interest rates will reduce inflation. It's down to the BoE to control it.
report thisAnonymous 1 needed this 'off the record'
Jul 23, 2010 at 15:14
Brookes warns "You could be wiped out" and "You could be toast" . Charming speak, but hey he is a banker/investment type, so excuse me if I give his sales pitch and sure fire certs a miss.
report thisAndrew 2
Jul 25, 2010 at 12:29
Anonymous 1
I agree with you.
Anecdotally, lately I'm meeting numerous folk, over whom the Axe is poised. When the departmental reviews are done,and the decisions implimented, the majority of these unfortunate folk (and I'm one of them) will be chopped. Then the winter of discontent Mark II, will begin.
The BoE can easily control inflation, but chooses not to. Remember their pension fund moved nigh-on wholesale into indexed link gilts 18-24 months ago when we had negative inflation and they were cheap. A very clever move, and they all knew it.
So as you can see, the BoE have a vested interest to keep inflation at double the target or more. They should be forced to bring it back to zero, which means no more QE and 5% Base rate.
It will not happen.
It is time that the savers of Britian united, withdrew their money from all the banks, one bank at a time, deposited it offshore, and watched the Bankers squirm. We need a leader with sound organisational skills and I'm afraid I don't have those.
Any volunteers, (a former banker with a sense of honesty possibly!)
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