Trustnet Magazine 86 July 2022 | Page 30

Performance of sector and indices
YOUR PORTFOLIO
Performance chasing

Performance of sector and indices

Name 1980s (%)( 1990s (%) 2000s (%) 2010s (%) MSCI Japan 1,575.8 -8.16 -31.31 130.67
IA Technology and Technology Innovations
N / A 782.2 * -57.11 310.25
FTSE 350 Tobacco N / A 172.0 742.82 125.26
* Data from 16 / 07 / 1991 Source : FE Analytics
De Lisle says that if these road bumps hadn ’ t appeared , value would have endured . “ It went into a hiatus and re-asserted itself from November 2021 ,” he adds . “ For instance , value has beaten growth by 10 % in 2022 .” De Lisle admits there is a risk he is wrong and we slump back into a deflationary environment . In this scenario , he says he would have to rely on stockpicking to outperform , which is more difficult than leaning into the dominant tailwind . A fool ’ s errand But trying to forecast the future is as much of a fool ’ s errand as performance chasing . Even getting your predictions right is no guarantee of making money . You would have been unlikely to predict Covid in 2020 , and even more unlikely to predict it would result in double-digit gains for the global market . The only way to get around this is to rebalance your portfolio regularly . This means taking profits from areas that have done well and putting them into those that have underperformed . This runs the risk of missing out on further gains from an extended rally – for example , value managers claimed growth stocks looked expensive at every stage of the 2010s , yet recycling profits into cheaper areas would have resulted in underperformance . It is at times like this you start to understand the appeal of tracker funds .
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