Charles MacKinnon: Why I'm banking on cash

‘It’s always difficult to know what’s going to happen and at the moment we are at a curious turning point because of the end of credit finance in the US,’ MacKinnon said. ‘If you know that you don’t know what’s going to happen then you must position yourself that way.’

As a result, the firm has invested defensively and will continue to review its medium risk portfolio regularly.

MacKinnon anticipates moving more funds into securities to provide protection against inflation, whether through commodities plays or through bond funds, though he will avoid index-linked bonds on the basis that they are now too expensive to serve a protective function.

At 6%, the cash allocation in the portfolio is currently high and MacKinnon plans to maintain that position.

‘We’ve got lots of cash because we can’t be sure what to do with it,’ he said.