Russia's threatened invasion of Ukraine, soaring inflation, rising bond yields and weak equity markets all raise the feeling of uncertainty. In this note we try to put this in perspective and have updated our chart showing the long-term rise of global markets, despite major world and health events. We remind readers that this uncertainty is not a valid reason for reducing equity exposure.

Anyone relatively new to investing could be forgiven for thinking that it is a simple game and easy to make money i.e. punt on what is going up most and buy the dips. Perhaps even those who have been investing for a decade or more might be thinking the same. In this short note we take a quick look back at what has happened in the recent past and how best to structure a portfolio today for the years ahead, given that we live and invest in an uncertain world.

If you have ever been fortunate enough to swim in the azure tropical waters of the Caribbean, or on Bondi Beach amongst the surfers, or in the chilly waters of Cape May (where the film ‘Jaws’ that scared the 1970s generation out of the water was filmed) in the back of your mind may have lurked the thought that a large shark might just be out there looking for lunch.

As an investor one is always learning. Our perception of investing is guided by our experiences: those old enough to have been investing in the 1970s will retain uncomfortable memories of rampant inflation and the impact that had on cash, bonds, and the general travails of life when prices spiral upwards.

If Sleeping Beauty had been woken from her slumbers on New Year’s Day 2021, she would have been pleasantly surprised by the value of her global equity portfolio for however long she had been asleep. Somewhat remarkably, over the past year, she would have been up for the year and blissfully unaware of the tragic pandemic that has tainted 2020 and caused such market ructions in March and April. In fact, she would be wondering what the worry with investing was all about.

2020 will certainly go down in history as a momentous year, with the tragedy that is Covid-19, the painful global downturn that has ensued, the major curbs on personal freedom and the end of one of the most divisive presidencies in the US, carrying the headlines. What will almost certainly be a forgotten as a footnote to the year is the fact that it is looking likely global equities will finish the year slightly up on where they started it.