A little over three years ago I was instrumental in the setting up of an investment club. Properly constituted and run, these can be educational, profitable, and fun. This group, based originally around my local rugby club, has been all three for its members.

I attended the club's AGM this week. Of course, the point of an investment club is that members make up their own minds, but even so I was quite surprised to see how independent they had become in their decisions, even though they had an experienced stockbroker to turn to for guidance.

Two thirds of the club's assets are now in cash and they decided to keep it that way at Wednesday's meeting.

Although not every investment they have made has turned out well, by being disciplined and debating fully the options before taking action, the club has done well. Their decision to cash in a large number of holdings a few weeks ago does not look too bad so far, but the question is what to do with the money.

There are plenty of shares they would like to buy but not at these prices. One of the companies discussed as representing the type of quality they would like to include in their portfolio was Siebe.

Siebe was the source of some embarrassment to me recently. A good relative performer this year, I tipped the stock in a television interview. The advice was given in the knowledge that the results were imminent, but Siebe was not usually in the business of disappointing shareholders. Nor did it, in terms of a 15 per cent rise in pre-tax profits, but the more cautious than usual nature of the statement accompanying the results was enough to wipe 10 per cent off the shares in a day. The company believes that commercial life will become tougher in the months ahead, so it is accelerating a restructuring programme aimed at diverting more of its manufacturing capacity to low-wage countries. Job losses in North America and Europe will follow as the company battens down the hatches, but that news did not strike me as a reason to suddenly go negative on Siebe. Rather, it seems to be ahead of the game just at present.

Economists believe that by the year 2010 less than 10 per cent of America's gross national product will be represented by manufacturing industry. It will be the service sectors that dominate not only on the other side of the pond, but in all developed countries. A revolution is taking place no less dramatic than that which ushered in industrialisation to replace agriculture as the dominant economic force in the middle of the last century. Yet even as this manufacturing capacity transfers to the lesser developed countries, emerging markets remain in disarray. Currencies, stocks and bonds in South-East Asia, Eastern Europe, Africa and Latin America remain under pressure. Hardly cheering news.

One interesting snippet is that container rates seem set to rise. Apparently, such is the surge of exported goods from the Far East that containers and the ships to carry them are insufficient.We all knew it was likely, but most people have been happy to ignore the likely knock-on effect of cheap Asian imports. The effect on profitability over here could be quite severe. This investment club may have got it right. For now, keeping your powder dry seems the prudent option.

Brian Tora is chairman of the investment strategy committee at Greig Middleton.