Newly hired AJ Bell financial analyst Laith Khalaf has called on investors to further diversify their sources of income, following the economic instability caused by coronavirus.
Speaking exclusively to fundeye, Mr Khalaf argued that the current investment environment was not favourable towards income and value investing, and that managing risk required a more flexible approach to allocating resources.
"One of the key challenges facing investors is getting income. Cash and bonds would normally be part of the solution here, but yields have been on the floor ever since 2009," Mr Khalaf said.
"Add into the mix the fact that Covid has devastated some investments that could normally be relied on to provide a decent income, while exacerbating the market leadership of some of the big growth stocks, and you have a pretty grisly picture for income investors, and value investors more broadly.
"There’s no easy answer here, but diversifying your sources of income is a must, and saving more to take account of a low-income world is desirable, though clearly more difficult to achieve."
Laith Khalaf
His observations on the state of the asset management industry follow his appointment on 28 September as a financial analyst on AJ Bell’s investment team.
Joining the platform initially on a 10-month maternity cover contract, Mr Khalaf will be responsible for producing expertise focused on investments and personal finance topics for both AJ Bell’s customers and the wider financial media.
Commenting on the economic uncertainty following the outbreak of Covid-19, Mr Khalaf also said that platform providers such as AJ Bell would remain appealing to investors as long as the foundational tenets of investing remained intact.
He explained: "Clearly these are strange times, but for investors the basic principles endure. In particular uncertainty, and risk, are part and parcel of how markets function, and are mitigated by investing for the long term.
"Investors can’t avoid risk entirely, but they can be aware of it and position their portfolios appropriately - that’s where a platform provider can help with good communication and simple execution."
Mr Khalaf started his career in financial services at Hargreaves Lansdown in 2001, following the completion of a philosophy degree at Cambridge University. During his 18 years at the company, he held multiple roles across the pensions and investments sectors, covering both DIY and advised business. In 2007, he began to focus more on research and analysis and has since developed into a prominent industry commentator.
Charlie Musson, head of communications at AJ Bell was pleased with the arrival of Mr Khalaf, praising his investment coverage and the experience he would provide to the team.
“Laith’s experience and investment knowledge make him an excellent addition to the team. He has a proven track record of producing analysis and commentary that can help people understand investing which I’m sure is going to be a great help to our customers and the financial press,” Mr Musson said.
Established in 1995, AJ Bell is one of the largest investment platforms in the UK with assets under administration of £54.3 billion and 282,000 customers.
