Merryn Talks Money Looking to Protect Your Wealth In Crazy Markets? Here's How.
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Mar 14, 2025 Sebastian Lyon, founder and chief investment officer of Troy Asset Management, dives into safeguarding wealth in unpredictable markets. He shares insights on the challenges faced by the UK investment trust industry due to low interest rates and offers a hopeful outlook for its recovery. Lyon discusses the nuances of American investment strategies, urging caution, while highlighting gold's enduring value against the backdrop of fluctuating economic conditions. Get ready for practical tips and a thorough exploration of investment strategies!
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Investment Trust Sector Disruption
- The investment trust sector has been disrupted by Saba Capital's activist attacks, impacting liquidity and share discounts.
- This disruption traces back to the 2008 financial crisis, zero interest rates, and the subsequent surge in investment trust issuance.
Discount Control Mechanisms
- Implement discount control mechanisms (DCMs) to manage share discounts and deter activist investors.
- Issue shares at a premium and buy back shares at a discount to maintain price stability.
Shifting Market Dynamics
- A rising yield environment has changed the traditional relationship between bonds and equities.
- Inflation has become stickier than anticipated, necessitating a cautious approach to fixed income and duration risk.
