With the value of many investment portfolios down 30%-40% during 2008, many investors have been left to think whether there is still anywhere worth putting their money. There is a school, of thought that the share market is likely to bounce back in the second half of this year, but equally there are those who prophesise that 2009 will be a year of massive job losses and a consequent contraction in company profits.

Everyone has investments, even if it is restricted to our superannuation, we need to allocate this money somewhere, but where?

To totally exit the share market is to sell out at historically low prices, this may end up having been a good idea, but just as likely will result in the combination of crystallising losses and having no exposure to a possible very strong turn around in the performance of the share market. Whatever its direction, the share market is likely to move ahead of the economy, so any signs of improvement may well result in a strong increase in share prices

This does not alleviate the fact that it is currently very difficult to choose investment managers and even investment classes that are attractive in the current environment. Two obvious places are cash and bonds, both these sectors have outperformed the rest of the market during the last year. Cash is the safe option, but it cannot be ignored that some bond funds making very impressive gains, on the back of the expanding cost of money on international money markets. Many analysts expect bond funds to perform well in 2009 as well, as the turmoil in financial markets is far from resolved.

An alternative investment product, of some interest, which has just been released and may be of interest to investors is Man Investments’ Man OM-IP AHL. This fund will invest using the AHL Diversified Program, a computerised trading system that operates across 150 different markets. This system has achieved a 17.3% annualised return since its inception, but must interestingly has shown a significant disconnect with movements in the worldwide property, bonds and stock markets.

This platform made a 17.6% profit for the year to November 2008. See here for more details. There is also more information on Man Investments in the links area of this site.