One of the more exasperating myths about investing is that it is just another form of gambling. This is a useful belief if you are looking for reasons to justify hiding in cash. But it is wrong. The best investors are the opposite of gamblers. They are seeking to manage the only risk that really matters – permanent loss of capital.

I was reminded of this when reading the latest quarterly report from Personal Assets Trust (PAT), an investment company that neatly summarises its purpose as follows: ‘to protect and increase (in that order) the value of shareholders’ funds per share over the long term.’

There is a lot packed into that short sentence. The preference for capital preservation over growth. The focus on not diluting…