In this blog, PM+M’s Neil Welsh provides an update on the current investment landscape and outlines what you need to do in light of ongoing restrictions…
As we adjust to Autumn and what looks like several more months of COVID-19 restrictions that are likely to take us into the New Year, I thought it useful to reflect on the last six months from a financial planning and investment perspective.
At the beginning of the pandemic, investment markets reacted in their usual way. We saw markets plummet which led investors to ask themselves and their financial advisers the inevitable questions of “should I sell/withdraw my funds or jump to cash?”.
Hopefully the charts below will highlight why our advice then, as well as now, is to remain invested in line with your attitude to risk. As ever, it is a case of time in the market rather than attempting to time the market.
The charts highlight the differences between bank base rates, inflation, the Balanced (global medium risk) sector index, UK FTSE100, FTSE World Index and American S&P500. Whilst these are illustrative only, as any recommended investment portfolio would only be provided following some detailed discussion around your needs, objectives, hopes and fears, they still make interesting reading.
Picking out a couple of highlights – the S&P500 has risen by 27% in the six months to 28/09/20, compared to the FTSE100 which only grew by 8%, whilst the global Balanced sector added 15% of value. The importance of being global in outlook and not necessarily needing to be adventurous to be rewarded is clearly seen. If we extend our view to five years of history we see even more dramatic numbers with the S&P producing 125%, FTSE100 21% whilst the medium-risk Balanced sector grew by 34% during a period where inflation ate up 8% of value.
To summarise, wherever you are on your financial journey, it is unlikely that cash returns will meet your future needs. Factor in the tax relief of pension contributions or tax efficiency of ISA and there shouldn’t be many reasons why talking to a friendly expert about the possibility of investing isn’t on your list of things to do.
Don’t delay it and get in touch with us today. We’re currently offering FREE wealth management consultations, in which we can provide advice tailored to your situation and objectives. Please get in touch via the button below to arrange yours.
This information is correct as of 7 October 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.