On Merryn Talks Money, Fidelity’s Alex Wright makes a case for why the next decade belongs to the UK.
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Looking for long-term outperformance? Sell the US and buy the UK. That’s the view of Fidelity’s Alex Wright, who joins this week’s Merryn Talks Money.
“Certainly on a 10-year view, I definitely think that the performance of the UK market will be better than the US,” Wright says. “I think it's a far more interesting proposition because of where the valuations are today.”
The truth about investing is very simple. The biggest determinant of long-term performance -- think 10 years plus -- is the price you paid for the assets in your portfolio. That’s it. So for the long-term investor, the first thing to look at is valuations. Is the asset you are interested in cheap or expensive? Look at it from that perspective and you might find yourself moving away from the both expensive and frighteningly concentrated American market. You might also note that, while the idea of permanent US exceptionalism has taken hold over the last decade, that likely won’t last.
As Wright points out, the UK market is very good for a contrarian looking for value plus a little momentum.
Also in the episode, Wright discusses the opportunities in banks, life insurers and tobacco companies, and why he thinks Tesco is a good buy.