‘Timing is everything’ runs the investment cliché – actually it’s not: being right is better. In any event, spare a thought for the writer of this investment review who has been told that it must be in final form by 27 March. Of all ridiculous deadlines, this must rate with ‘the future of the British Army’ (deadline 1 May 1940) and ‘How are you enjoying the play Mrs Lincoln?’ (copy back to the editor at the end of Act One). This review will not take a punt at the twists and turns of events which, by the time they are read will allow the reader a snigger at the butterfingered analysis of the future not blessed by accurate prediction.

Let me start with an update on our investment progress. Three months ago, we, and our clients, had experienced a quarterly loss, which was particularly troublesome because many clients have been prepared to accept the recent dearth of upside because of our ‘skill’ at protecting the downside. The sharp recovery of equity markets has given us the satisfaction of seeing the very equities which did the damage at the end of 2018, lead the way upwards in the first quarter. In my mind, that returns the spotlight to the central question for Ruffer portfolios: are they properly positioned for today’s weather conditions? If we are indeed facing the onset of wealth-changing disorder, then the answer is ‘yes’. What we cannot be sure of is that we will make significant returns until the typhoon hits. At Christmas time, there was maximum danger in the markets because the Federal Reserve had mispositioned itself. This ‘mistake’ has been corrected, and we are back to the true battleground. Can the Fed, with its discretions and its firepower, keep a market dislocation at bay, or halt it once it has begun? We think not. Portfolios need both a depth of protection, so that dislocative, chaotic markets can be weathered, and a width of protection, since the nature of chaos is intrinsically uncertain. It is prudent not to take risks with this ahead of its denouement, but that does not mean that the portfolios are either risk-free, or reward-free.