top of page
  • Martyn Johnson


In my last newsletter I looked at inflation which can (hopefully) be viewed as long term risk. In this edition, I consider the interaction between timescale and risk.

Market Commentary

UK public finances worsen with the highest March end borrowings since WW2, up from £57 billion in the previous year to £303 billion - not quite as bad as was predicted (media disappointed). Household savings up as Covid makes rich richer and the poor poorer. 'Flexible working' is the new buzz phrase.

Short, Medium and Long Timescales

Some years ago, there was a lot of speculation in the press about the likely out performance of shares in one of the UK’s largest banks. I took calls from two clients at the time; the first client had the idea of buying some shares with a view to holding them for a few months and then selling at a profit ((black) horse-trading?). The second client was celebrating the birth of a grandchild and wanted to buy the same shares to hold for the kiddie until she was 21.

Both clients were interested in buying the same underlying securities but, and this is the rub, the investments represented very different risk levels with the former being very high risk and the latter less so – because of the timescale differences.

We are interested in investment rather than speculation and hence we will only take on clients whose timescale is upwards of five years, and this in turn means that we can have a reasonable expectation of our clients getting rich slowly; in this it is arguable that we are being self-serving since we want happy clients.

I have used the example of shares but the principles above apply to most asset classes - house values for example can be quite volatile (risky) in the short term but over 5 or 10 plus years there is typically a more stable outcome; it is even possible that some of our kids may stabilise in the long term.


Time in the market rather than market timing is our ethos. By taking a reasonable timescale and being prepared to be patient - and most importantly not panicking when values fall, as they will from time to time – it is possible to get good returns with reference to inflation and deposits.


The highlight of many people’s lives until recently was going to the (essential) shops, and I see that it is now possible to buy toilet rolls and pasta, good job they never ran out of beer. From our perspective shortages are interesting and the latest things to fall under this heading are sand (for building), semiconductors (car factories are suspending production for lack of them, the Mini factory being the latest) and cardboard (presumably due to the Amazon vans flying up and down our close several times a day). Shortages lead to irrational behaviours – fear and greed again - which is why I am always interested in psychology and its correlation to investment behaviour. As always think about what YOU are feeling and doing – this is a good starting point for analysis.


Perception of time when our kids were younger – some five miles into our round Europe touring holidays – "are we nearly there yet, Dad?" Again, when our kids were younger – "when YOU were young Dad, were you in black and white?" Finally, I remember going to the cinema with my Dad – who asked the cashier "is it a talkie?" Times winged chariot…

Recent Posts

See All


bottom of page