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Dear Reader
Welcome to May's newsletter!
I will spend a little time looking back at the market events over the last 6 years and in the context of today what we have learned.
The rest of this month’s newsletter is packed with ideas and links that you may find interesting. As always, we’re here if you'd like to discuss how any of these ideas might apply to your unique situation.
Feel free to share - I continue to grow my business since moving firms, if you know anyone who might benefit from this content please do share, it would be really helpful.
Regular numbers update
Markets - unimportant and important numbers!
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Inflation - the real enemy
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The continued rise of financial adviser private equity-backed consolidators
As many of you will know, I left my previous adviser business because I felt clients were no longer central to decision making. And I feared that the business would simply be sold on again, to a new set of owners, with a new set of motives.
I came across this article in LinkedIn and it sums up the situation well.
I believe in an advisory business that puts listening first, then financial planning, and not adding 'assets under management', or moving investments to an in-house 'solution'.
This month's reflections - a tale of the 2020s
Investing is both a science and an art.
The science of investing can be learned in books, the classroom, and by following your curiosity online. Understanding inflation, interest rates, asset allocation, and legislation gives you the foundation for becoming a successful investor.
But it’s the art of investing that will ultimately determine your success. And the art of investing cannot be learned in a textbook. It gets taught to us by the events we live through. The events we see coming, and the events that blindside us. But only if we learn from them.
From time to time, it benefits us to reflect on history so that we can be more prepared for the future.
Six Years in Events
It’s now been six and a bit years since the start of 2020. In that time, investors have been through a lot. With markets currently calm, but having recently come through the US-Iran chaos that isn’t quite finished, this is a good moment to look back at what we’ve actually faced, and what those experiences can teach us.
We tend to think of major market events as something that happens every few years, with mostly quiet stretches in between. The recent past has been busier. We can’t predict whether the next six years will look the same, but what we’ve lived through over the past six years is worth a deliberate look.
- March 2020. The Covid pandemic shuts down the global economy. Markets fall 34% in 32 days.
- February to October 2022. Russia invades Ukraine in February. Global inflation hits 40-year highs, the rate hike cycle begins, and markets enter a bear market in June.
- September 2022. Liz Truss’s UK mini-budget triggers a gilt market crisis.
- March 2023. Silicon Valley Bank, Signature, and Credit Suisse all collapse within weeks. Fears of a 2008-style banking crisis.
- October 2023. Hamas-Israel war begins.
- August 2024. The yen carry trade unwinds. The Nikkei has its worst day since 1987, and global markets follow.
- January 2025. Chinese AI startup DeepSeek triggers a global tech sell-off. NVIDIA loses $589 billion in a single day.
- April 2025. Trump’s “Liberation Day” tariffs trigger a 12% S&P 500 decline in seven days.
- March 2026. The US-Iran conflict closes the Strait of Hormuz. Markets fall around 10% from recent highs.
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Six Years In Numbers
At the end of 2019, just before any of this began, the S&P 500 (often used as a benchmark for the global equity market) closed at around 3,231. At the end of April 2026, it sits at 7,209, having recently passed 7,000 for the first time. That’s a gain of 123% over six years.
In 2019, the companies that make up the S&P 500 collectively earned around $139 per share. In 2025, they earned around $253 per share. The businesses you own through a diversified portfolio are earning substantially more than they were six years ago, despite living through everything on the list above.
How many of these events were you losing sleep over at the time? None of these worries were wrong. The events were serious, and being concerned about the world is a normal response. However, hindsight gives us a perspective we couldn't have at the time.
It shows that short-term feelings and long-term meaning often operate on different time scales. For many long-term investors, the risk of missing a recovery can be as significant as the discomfort of a decline.
The Balance We’re Trying To Hold
Staying informed about the world matters. The challenge for a long-term investor is not letting that information derail your plan. The two can pull in opposite directions, particularly when the headlines are loud.
If you’ve remained invested through these six years, in line with your long-term plan, you’ve learned lessons that will strengthen your resolve if the rest of the decade brings similar uncertainty.
The smart investor’s challenge is to internalise the lessons and be prepared for the next test. That’s how you learn the art of investing.
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Every investor's situation is different. If you'd like to discuss how current market conditions may affect your own financial plan, please reach out.
Compliance disclaimers: what they should really say.....
The value of investments and any income from them can fall as well as rise. You may not get back the full amount invested, you may get more. Past performance should be used as a guide only and is not a guarantee of future performance.
Reading, videos, podcasts
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Listen
The Previous Week’s Newspaper [4 minutes]. Reflecting on a provocative idea from Nassim Taleb: If you want to break your addiction to the news, try reading it a week later.
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Great visuals
Thank you
As always, I hope you enjoy this month's updates, do let me know what you enjoyed and any ideas you might have for future newsletters.
Meanwhile, here if you need.
With best wishes, Gary
Gary Smithson - Partner, Farringdon Asset Management Singapore and Malaysia
gary-smithson-farringdon.kit.com
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