Once, says Jan Mantel, the new head of the UK and Europe equity team at Baring Asset Management, the process was leisurely. If you had an idea for a stock purchase you could think about it for a while, discuss it with colleagues and analysts, visit the company, think about it further, go on holiday, then return and implement the transaction. This could take weeks or even months and, if the share price was 10 percent higher six months later, you were a hero. Today, with volatility so much higher that several shares move up or down by 10 percent or more each day and many move by 5 percent or more, the old ways are no longer appropriate.
Analysts have to be prepared.
Others, however, have moved in precisely the opposite direction, preferring to take the Warren Buffett approach to investing and research meticulously, buy for the long term and accept that the short-term pain may sometimes be acute. In the long bull market up to the beginning of last year, the fashionable style was growth. If you picked a fast-growing company to add to your portfolio, the chances were that you benefited. In the bear market since then, value has been more successful as managers looking for undervalued companies have won the laurels. Some fund management companies that adopted a growth style are, therefore, modifying, or considering modifying, their tactics, while others are offering their clients a range of styles to suit each one individually.