Into my third “cancer year” and worm sessions with the nasendoscope are now every 3 months as treatment finished June 2007. Readers who have missed my fascination with this intriguing bit of kit, see  http://www.georgeemsden.co.uk/2007/09/the-positive-side-of-cancer-part-9-which-nostril-sir/ but today it’s the right nostril for a change and no (local) anaesthetic. Session is quite short and gentle, the long worm is slowly extracted, put in a tray for cleaning, so it can do its duty again inside someone else’s head. While the new doctor is writing up the notes, I mention my magnum opus http://www.georgeemsden.co.uk/2009/05/financial-planning-for-people-with-cancer/ which colleagues of his have appreciated. Explaining that the idea of this blog is to enable terminally ill people make the most of what time they have, he replies that they deal in averages and that treatment is basically aimed at the 50 per cent who are likely to live > the 12 months example I mentioned. He thens adds that life expectancy can sometimes be like, How long is a piece of string? often, you never really know…..and some people cope better with this issue than others.

The classically-minded here might recall The Three Fates from the Greek Myths who respectively, spun (Clotho) measured (Lachesis) and finally, cut (Atropos) the thread of life for all of us – including the Gods apparently  http://july.fixedreference.org/en/20040724/wikipedia/Moirae

Winning is a subject that generates hundreds of books each year, 72,998 entries in a quick look on  www.Amazon.com but staying ahead of the pack year after year in the Stock Market is very rarely achieved – making life very interesting for IFAs, for example. Easy way to start a bun fight among IFAs or fund managers, is to talk about active and passive investing. Active management can be called stock picking (and selling) with its top down (sector driven) or bottom up (attractive individual shares in any sector) approaches. Passive management is about buying and holding shares to keep to the market/sector average and if the managers do that, they pat themselves on the back – as it is quite diffcult in the long term. Fraudster Bernard Madoff’s apparent consistent positive returns in his hedge funds when everyone else was losing money, were the final giveaway that something was wrong.

One of the few managers who has done this and been a winner or at least stayed in the very first few, is Anthony Bolton former manager of Fidelity Special Situations Fund. Anthony retired a couple of years ago and the fund was split into two. His successor for the half that carries on the same name name has some interesting views on what shares to invest in http://www.citywire.co.uk/adviser/fund-and-fund-manager-performance/-/unit-trusts/uk-all-companies/fund-factsheet.aspx?FundID=7016&CitywireClassSchemeID=1&CitywireClassID=9

Successful funds can be the victim of their own success. Better performance means more money flows in. If you are following a particular active strategy e.g. UK Smaller Companies then there is a limit to the number of buying opportunities – only a limited number of shares will meet your criteria and be attractively priced. There are also limits (say, 5% of the issued shares) of how much a fund can hold of any one company. With more and more money coming in which you have to invest sometime, you can end up buying a bit of nearly everything meaning the fund has some good stocks, some average and some duds, resulting in average or bland performance. So if you end up with bland performance after all this effort, why bother choosing individual stocks in the first place?? explaining perhaps why passive investing is becoming more popular.

Investing in a collective fund is less risky than buying individual shares (unless maybe you have £250,000 +) but is not without risk and the above fund’s objectives are stated in the bottom RH corner of the above-mentioned web page. To clarify, this isn’t a widows and orphans investment. It is an equity-based fund that takes a punt (albeit an educated one) with undervalued i.e. they have been through a bad patch shares but if you have high hopes, are happy with the risk, don’t want to risk paying Capital Gains Tax if you make a big profit when you sell out, it can be bought via a Stock & Share ISA. Here the annual allowance is currently £7,200 but from 6 October 2009, it is £10,200 IF you were born before 6th April 1960. A few bravehearts tried to get the Government to simplify this nonsense and just have a straight increase, but no joy. Partly explains why the UK now has > 10,000 pages of tax legislation while the supposedly regulation-mad Germans survive with under one fifth as many pages.

Market research by insurance and investment companies is usually interesting and gives an opportunity to find out how other IFAs are doing. Meetings are held in a room with a one-way mirror at one end, everything is taped, albeit within strict market research guidelines and top brass from the client company sometimes attend – hiding behind said mirror. Six of us are asked about our views on a whole range of things, mainly due to rebranding resulting from one company being taken over. Seems incongruous to have one good insurance company name for investment bonds and another for pensions when all part of the same group, but sad to lose a perfectly good name. Can we see any “green shoots” of recovery? No, though we are all busy.

Two final points of consensus – firstly, we hope the well-known insurer keeps up its service standards. These are often sacrificed to save costs meaning the cost of sorting out mistakes is basically passed onto the broker – partly explaining why more of us are asking for fees these days for routine work. Secondly, the Government’s continual change, change, change in pensions – where Pension Simplification has become an oxymoron, makes people even more disillusioned about pensions and saving for retirement.

Finally, and perhaps to prove you can’t believe everything you hear, this week  I meet two very busy estate agents. One is busy with lettings and sales while the other mentioned last week, has recruited two people for his landscaping work.