2020 was a watershed year, and perhaps one of the greatest examples of the futility in predicting the future direction of the stock market.

2021 brings the usual cavalcade of those predicting the market to double or halve; regular readers will know what to do with these predictions.

One of the most frequent questions we have been fielding recently is what to do with cash? The conundrum of course, is whether to hold funds in very low-interest bearing accounts, or to invest in assets which many commentators deem to be too expensive and “risky”.

Whilst we have a great deal of sympathy with the fear of a market correction, we also worry that those who require an income and need their funds to work for them will find themselves falling further behind; arguably this is the bigger risk.

Whilst one can’t invest in businesses via way of the sharemarket without short-term price risk, the long-term risk of wealth diminution can reduced by sensible investment with a reasonable number of holdings, whilst the opportunity for a reasonable return on one’s funds is obvious.

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