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What we’re thinking about markets right now
A short note this time. We held an interim committee meeting this week, a little ahead of our full September meeting, so that all three committee members could be together for the annual review decisions. The full meeting still goes ahead on 18 September. This is what we decided in the meantime.
We went through everything. The split between shares and bonds. The balance between the UK, the US, Europe, Japan and Asia. Smaller companies. Gold. The bond positioning. Each one got the same question: is there a compelling reason to change this?
The honest summary is that we checked everything and changed almost nothing. That sounds like a confession. It’s actually the outcome we hope for most years.
What we are doing
The one action is the rebalance itself. Over the past year, shares have done well. So the funds have gently drifted to hold a little more in shares than the plan intends, and a little less in bonds. We’re rebalancing that back to the agreed allocations.
It's worth pausing on what that means in practice.
Rebalancing is selling a little of what has done well to top up what hasn't. In other words, selling high and buying low. Everyone agrees that's the aim. Almost nobody enjoys actually doing it, because it means selling the thing that's been winning. Which is exactly why we do it by rule, on a schedule, rather than by mood.
What we looked at and left alone
We asked whether any region of the world deserved more or less of your money. Right now, none stands out as obviously better or worse value than the others, so no tilting.
We asked whether to lean harder into longer-dated bonds, which would pay off if interest rates fall from here. There’s a reasonable case. But our current bond positioning already benefits if rates fall, while collecting a decent yield in the meantime, without making a big bet on the timing. We kept it.
We asked whether to add energy to our commodity holding alongside gold. We decided the complication wasn’t worth what it might add.
That was the pattern all meeting. There is always a story that argues for doing something. The discipline is in only acting when there’s a reason, and right now we weren’t seeing any.
What this means for you
Nothing for you to do. The rebalance happens inside the funds. You won’t see it, other than the portfolio sitting back where it’s meant to sit.
A quiet update, then. We looked hard at everything and did one routine piece of tidying. Most years, that’s what looking after money properly amounts to.
Next Investment Committee Meeting
Our next full meeting is on 18 September, where we’ll cover the usual monthly agenda in full.