Lyon: Prepare for a Market Correction

Gold-rated fund manager Sebastian Lyon of Troy Trojan and Personal Assets Trust is selling out of equities and into gold and gilts in preparation for a stock market correction

Emma Wall 23 February, 2015 | 10:00AM
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Stock markets look buoyant today – boosted by positive news from across the Channel. As Germany and Greece put their differences aside, many market makers are prediciting a new all-time-high for the FTSE 100. But veteran fund manager Sebastian Lyon of Troy Asset Management is warning investors not to be too hasty.

Lyon, who runs the Gold-rated Personal Assets Trust (PNL), is selling out of equities, prepping his portfolio for a market correction. The fund manager says that current market conditions remind him very much of pre-tech bubble Britain, just before the stock market crashed.

“Prior to the dotcom bubble bursting equities enjoyed an 18-year bull market, making investors 10 times their money. But when we launched Troy in 2000, I looked around and thought 'that is not sustainable'. The equity market was very high and I believed a portfolio fully invested in equities would not be able to deliver long term returns – and I was right. I feel the same about global stock markets right now,” he said.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Berkshire Hathaway Inc Class A427,832.75 USD0.00Rating
Berkshire Hathaway Inc Class B283.09 USD0.00Rating
GlaxoSmithKline PLC1,510.80 GBP0.00Rating
Imperial Oil Ltd41.79 CAD0.00
Personal Assets Ord49,405.99 GBP-1.09Rating
Sage Group (The) PLC773.60 GBP0.00Rating
Trojan O Acc394.81 GBP0.11Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar