Welcome to Sterling’s monthly update. We hope that this email finds you well and we hope that you continue to be pleased with our service. In order to deliver our update more efficiently we have moved to this new format.

In addition, now that the economic backdrop appears more settled, we have introduced three further portfolios. The Cautious Diversified Portfolio, which is currently being employed for just about all of our clients, still serves as an excellent home for the more cautious investor. However, clients with a longer-term view may now wish to consider more exposure to stockmarket investments and we have introduced the Balanced Diversified portfolio for this purpose. We have also introduced a purely stockmarket based investment strategy for adventurous investors, known as the International Equity portfolio.

Finally, we have introduced an Absolute Return Portfolio, designed for those who are particularly risk adverse, but who are just fed up with low interest rates. Its purpose is just to outperform normal interest rates consistently in a low risk fashion with a shorter term time horizon.

We will be writing out during the early part of December with our recommended alterations, but of course, if you have any queries in the meantime please do not hesitate to contact us.

For more information on our current services and investment opportunities, you can visit our website or contact your advisor.

The investment markets paused for breath during October. Having seen one of the sharpest stockmarket rally’s in history it was no surprise that a small step back was on the cards. The past 10 months clearly demonstrates the fickle and volatile nature of stockmarket-based investments. The global financial stimulus packages cloud the longer-term visibility of all asset classes – but in the medium term we remain confident that the trend is upwards.

The fears of a deflationary spiral have abated and we are pleased to see some kind of normality returning to the property and corporate bond markets. The fate of all investments is very much in the hands of the central banks and global governments as it has been since the start of the fiscal stimulus experiment. We are comfortable that interest rates will remain low for a sustained period, unlikely to increase to any extent until unemployment starts to fall. Any shocks and sharp declines will surely be as a result of premature withdrawal of the stimulus plans or any unintended consequences associated to addressing global economic imbalances.

Overall the funds in our selected portfolios have achieved results in line with expectations. The Octopus Fund has had a tremendous run, but did suffer on the back of results from the financial sector during September. On the basis that the fund is the highest performing investment in its sector during the last twelve months, we have no issue with this set back, but equally we remain reluctant to increase exposure to this fund followings its enormous popularity. The Octopus Fund features in each of the portfolio’s with the exception of the higher risk International Equity offering.

In the Cautious Diversified, currently our most popular portfolio, our biggest concern remains with Barmac. The fund really has failed to achieve the results expected. It has failed to capture the upside in market conditions and failed to produce the protection we expected during more volatile months. The fund will be removed and we will be writing shortly to request your consent to make the alteration.

Finally, our stockmarket based funds did suffer during October, reflecting the volatile conditions, but as indicated in the market summary we are more than comfortable that this represents a healthy set back rather than the start of longer term poor results.