‘I don’t have to pretend to like anything’: fund manager David Coombs’ advice for ordinary investors

The big advantage of being a multi-asset fund manager is one shared by ordinary investors, says Rathbones’ David Coombs: “I don’t have to pretend to like it at all.”

As Head of Multi-Asset Investments, David is in charge of the team responsible for managing Rathbones’ free funds, and this can mean holding shares, bonds, gold or more esoteric investments.

“You have the maximum open field on where you can invest: any asset class, any country, any type of company,” David tells This is Money’s Simon Lambert on the Investing Show.

He adds: “I never have to buy bad companies just to have a diversified portfolio, because I have many other levers that I can use.”

David also describes himself as a “quick profit maker” and prefers to cash in on some profits when investments do well rather than risk them evaporating.

He joins Simon on the Investing Show and reveals how he took an unusual path from dropping out of his A-level studies and getting a job in a bank to eventually becoming a fund manager, and what he’s learned along the way.

He discusses where he sees investment opportunities now, how the Magnificent Seven has become an asset class, why he is interested in resilient global companies with good exposure to China and does not accept the argument that the UK stock market is a essential stock market. It’s a bargain, but he’s a fan of UK profit machine retailer Next.

David also says that while he has had some esoteric investments over the years, including wheat, the return to more normal monetary policy has opened the door to reviewing major government bonds.

He says: “As interest rates have risen over the last two years, it hasn’t been necessary to be so esoteric because there have been more returns available from traditional asset classes.”

David describes his investing style as active and pragmatic and says that because he “hates losing money,” he is always looking for what can go wrong in an investment and how to mitigate it.

One piece of advice he has for investors is: “Don’t get attached to investments, be willing to sell anything.”

This doesn’t just mean weeding out the losers, but also being willing to put some profits into investments that have done well, says David, who adds: “I’m a quick taker of profits.”

It says it has a maximum position size and when an investment reaches that size it is forced to sell, taking the emotion out of the decision.

This does not mean abandoning the investment completely, but it does mean cutting positions.

David says: ‘Ultimately, that decision to buy and sell entirely is binary and most people put it off. Whereas, if you keep making profits, you’ll feel good because you’ve built up the profits but you’re still in them.’