Our content this month are as follows:-

• “Guru” admits cannot tell the future!
• In the News
• Books we have read
• Quotes of the month

John Authers, writer of the column, "The Long View " in the Financial Times has been telling anyone who would listen over the past nine months that the current rally was unsustainable. He has not been alone of course and Merryn Somerset Webb in the same newspaper has been banging on in the same vein, usually citing her experience in Japan, which she believes is relevant to everything!

In his column of 31st October he admits he "called the rally wrong" but of course, being a guru, he cannot leave it at that. Invariably, if somebody like Mr Authers has got something wrong, there must be reasons and through the crystal clear prism of hindsight he does not hesitate to share them with us. Here they are:-

The crisis could not end until some of the biggest US banks were nationalised (this was a common assumption, he says).

Many (including him of course) were unimpressed by the Obama administration debut.

The financial system seemed to need a drastic remedy (whatever that might mean).

Although price earnings ratios were low, they had further to go before any "true rally" could commence (this was based on his interpretation of previous bear markets).

China's economy appeared to be contracting.

Blah blah blah blah blah blah blah.

It really does not matter what his reasons were, because any number of gurus, forecasters and experts will have drawn very different conclusions from similar facts or the same conclusions from totally different facts. Something as complex as a modern economy has thousands of variables which will affect its future performance – the chances of any expert or financial journalist calling them all correct is extremely remote. For all of the things that Mr Authers took into account, there are many other things going on that he does not have a clue about; the problem with any forecast is that if you take into account fact X, Y or Z, fact A is going to make a complete fool of you.

Our message, as usual, is a very simple one. Ignore the noise made by financial journalists, economists, politicians, experts and gurus; do not try to time markets - you will get it wrong; build your asset allocation carefully, taking into account your capacity for and attitude to risk; rebalance systematically; take the long-term view, which will reward you with the premium the market pays.

The Financial Times, this month, has begun a campaign which has our full support. They would like fund managers to reveal their total charges in an easily understandable fashion. Most importantly they would like them to inform investors of the total trading charges a fund incurs; this particular cost has been demonstrated in many studies to often double the cost of a fund. Naturally, fund managers would prefer not to reveal this and Dick Saunders, Chief Executive of the IMA (Investment Managers Association) points out that this information is contained in the fund's annual report. How many investors are provided with that when a fund is recommended? The FT would also like to see an end to performance related fees, which are creeping in, in all kinds of areas and are simply a way of transferring investors’ money to the manager over a period of time.

In an article by Ellen Kelleher on 6th November some of the worst examples of actively managed funds charges are quoted. Not surprisingly they are from the "absolute return" stable, about which we have written before. BlackRock’s UK Absolute Alpha fund has a 5% initial charge, an annual management charge of 1.5% and shockingly of all a 20% quarterly performance fee if returns over a set period exceed three-month LIBOR (the interbank lending rate, which is currently around 1%!).

The funds we recommend have institutional charging structures and the lowest dealing costs of any fund management group. We are happy to let anyone who is interested have information on how their costs compare with actively managed funds - you will not be surprised to learn that actively managed funds cost considerably more.

Breaking news as we go to press is that Anthony Bolton of Fidelity is to manage money again. We do not have many details but understand that he will run a China fund and Fidelity must be dancing a jig that they have him back in harness. Naturally we will not be recommending the fund and as you know we do not usually make predictions, but we are prepared to make an exception here with the following forecasts:-

• The fund will be expensive
• IFAs and other investment managers will blindly pile into it
• The fund will be volatile (risky)

We could be wrong but we will know the answers very early in 2010 and will be sure to let you know.

This month we are not recommending one book, but potentially 1500 of them! We have recently discovered the Amazon Kindle (which can store up to 1500 books), which has been available in the US for some time but was launched here only in October. This is an electronic book reader which allows you to download books in seconds using 3G technology, so you do not have to hook up to a computer to download.

You can only buy books on Amazon, but there are hundreds of thousands available and usually much cheaper than even the paperback version of the conventional book. You can also have newspaper and magazine subscriptions and if you wish load your own documents onto the device. If you are unsure about a book you can download the first chapter free of charge, paying for the book only if you download the rest. The page looks like the page of a book and you can buy a leather cover which adds more to the feeling of holding a real book.

Currently it is all available only via the American website - www.Amazon.com. Expect that to change as they take on more European subscribers.

If there is a book lover in your life this might make an ideal Christmas present.

"He who reigns within himself and rules his passions, desires and fears is more than a king."

John Milton

"A dream is just a dream. A goal is a dream with a plan and a deadline."

Harvey Mackay