Tag Archives: Election

Trumping the market!

shutterstock_353116961The vote is in and Donald Trump has been voted President, words perhaps few people expected to read this morning and a deja vu feeling of Brexit!

Whilst investors and markets would undoubtedly have preferred the more stable influence of Hilary Clinton, Trump as President might not be a disaster. It is worth noting that the power of the President’s Office is limited by the Constitution, through the chambers of Congress and the Supreme Court. The Federal Reserve also remains independent.

So what does Trump mean for investors?  Initially, as we saw with Brexit, markets are likely to be volatile and we have already seen falls in the Asian markets overnight; the FTSE is currently down 1.2%. During volatile markets, and especially when you may be showing some short-term losses on investments, it is tempting to sell and wait for the markets to improve before reinvesting.

It is perhaps useful to look at market patterns and history before making the decision to sell.  According to Fidelity International, an investor who invested in the FTSE All Share Index for the last fifteen years, but missed the best ten days would have achieved an annualised return of 1.46%, against 5.69% by those investors that remained invested. Missing the best forty days reduced your annualised return to -5.62!

Often the largest returns are achieved shortly after these falls, so the message is simple. Provided you have a clear investment strategy and review process in place, you should hold your nerve and investments, and over the medium and longer term you will be rewarded.

Like a game of Top Trumps, if you hold the quality cards you win over the longer term.

For a review of your pension and investments, please contact Antony Keen by emailing antony.keen@pmm.co.uk or by calling 01254 679131.

Vote for a Pension!

shutterstock_98671151As politicians go into election overdrive and the prospect of a coalition Government seems ever more likely, the major political parties are starting the pre-election give away as they look to gain favour with the voting public.

This week saw the Conservatives propose a new Nil Rate Band to save on inheritance tax.  The new band set at £175,000 would be applied to main residences and be available to properties worth up to £2,000,000. This means individuals would be able to pass up to £500,000 to beneficiaries free of inheritance tax when the new allowance is combined with the existing allowance of £325,000.  For couples, this could mean up to £1,000,000 is passed on tax-free.

So is there a catch I hear you cry! In short yes. In order to fund the new allowances tax relief on pensions would be restricted by gradually reducing the annual allowance from £40,000 to £10,000 for those earning more than £150,000.

The Labour Party have also announced they would reduce the annual allowance from £40,000 to £30,000 to fund a reduction in student fees from £9,000 to £6,000.

So it seems whether you vote blue or red future contributions into pensions will be restricted. For those of you planning to make a large pension contribution in the future, or if you earn more than £150,000, you should consider voting for your pension by making the contribution now in order to make full use of all the available allowances.

For more information or if you would like any advice on pensions, please call Antony Keen on 01254 679131 or email antony.keen@pmm.co.uk.

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.