Time to Re-establish Trust

Investor optimism is at a low point due to a lack of confidence in the financial system, and the reasons for this are many and varied. From the financial crisis of 2008 that erased a significant amount of investor savings to the Flash Crash of 2010, or scandals from the likes of Bernie Madoff and the exorbitant compensation of big financial firm executives, it is no wonder that the average investor has a dreary view of wealth creation via stock market investments.

The Financial Times ran a compelling story recently discussing how trust might be re-established with investors. The columnist summarized a number of salient points from a report written for the U.K. government by London School of Economics academic John Kay on how to restore trust in the equity market. The article caught my eye not only because I strongly agree but also because many of the suggestions are in line with how Burgundy has been managing investments since our inception: we behave like owners, invest alongside our clients and run concentrated portfolios with high active share.

The full research piece by John Kay (100+ pages) can be found here.


This post is presented for illustrative and discussion purposes only. It is not intended to provide investment advice and does not consider unique objectives, constraints or financial needs. Under no circumstances does this post suggest that you should time the market in any way or make investment decisions based on the content. Select securities may be used as examples to illustrate Burgundy’s investment philosophy. Burgundy funds or portfolios may or may not hold such securities for the whole demonstrated period. Investors are advised that their investments are not guaranteed, their values change frequently and past performance may not be repeated. This post is not intended as an offer to invest in any investment strategy presented by Burgundy. The information contained in this post is the opinion of Burgundy Asset Management and/or its employees as of the date of the post and is subject to change without notice. Please refer to the Legal section of this website for additional information.