Lean times mark post-millennium madness

'The picture painted is of a market moving sideways'

Hasn't the year flown by. It seems only yesterday that we were all worrying ourselves silly over the millennium bug. Now, here we are more than half way through the year. And if there is one aspect of the Year 2000 so far that is clearly plain, it is how difficult it has become to make money.

Hasn't the year flown by. It seems only yesterday that we were all worrying ourselves silly over the millennium bug. Now, here we are more than half way through the year. And if there is one aspect of the Year 2000 so far that is clearly plain, it is how difficult it has become to make money.

Towards the end of 1999, central banks were pumping money into the system to head off a possible liquidity crisis if the millennium bug disrupted financial transactions. The availability of a considerable amount of cash unfortunately coincided with a near hysterical rush into new economy stocks, which drove some sectors of the market into unsustainably high ground during the first few weeks of this year. Strip out the early flurry and subsequent correction, and the picture painted is of a market moving sideways.

UK investors may have lost money in the domestic stockmarket overall since the beginning of the year, but looking at the wider, international situation, they should have made a modest profit. This is because sterling has weakened sufficiently to deliver modest returns in many overseas markets. The exception is Japan, although this was one of the best performing markets in 1999.

But it is a rather dismal picture. Anyone solely following an Index Tracking strategy will certainly have lost money. Perhaps it is appropriate, that we are now seeing some of the most inventive Index Tracking vehicles ever. Barclays Global Investors has introduced I-shares, an Index Tracker that can be traded on the stockmarket, allowing you to time your purchase in or out of the market to the minute. Then there is QQQ, the NASDAQ 100 Index Tracker, which is being promoted over here following its success in America. In just over a year, QQQ has attracted some $14bn of assets in the US. Expect NASDAQ to make it even more accessible to UK investors as time goes on.

In America, of course, they have more sophisticated tracking vehicles. Over there it is possible to purchase funds that follow a specific industry, which could prove useful to any private investor who considers themselves nimble enough to leap on and off bandwagons. Be warned, though. With greater opportunity comes more risk. It seems most likely these more targeted indexed funds will be most popular with professional managers.

But, in the end, you will find that the most consistent outperformers of their benchmarks are those funds run by stockpickers - and it is having the discipline to research and monitor shares that separates the men from the boys. Any private investor seeking to take this approach needs to plan their approach very carefully. Fortunately there is an ever widening flow of information on individual shares available but if this approach looks to be beyond your capabilities, there are plenty of good managers out there. Perhaps we might look at a few in greater detail in the weeks ahead.

Brian Tora is Chairman of the Greig Middleton Asset Allocation Committee

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

    £20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

    Ashdown Group: Marketing Executive - 6 month FTC - Central London

    £25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

    Ashdown Group: Junior Project Manager (website, web application) - Agile

    £215 per day: Ashdown Group: Junior Project Manager (website, web application ...

    Guru Careers: Software Engineer / Software Developer

    £40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

    Day In a Page

    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers
    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'