6 ways to achieve a Happy Retirement


It was great bumping into Chris, a long standing client, yesterday and I have to say he looked terrific, relaxed and happy with life. Unfortunately, this is not always the case with retirees as research in the US by the Employee Benefit Research Institute (EBRI) indicates. The findings reveal that those who aren’t satisfied with their retirement are not from a specific economic group or gender but include, rich and poor, men and women, those with a good pension and those without.

Return of multi-generational households


Multigenerational households could be set to grow in popularity as property costs continue to rise. A new report from Aviva suggests that based on the rate of growth seen in the past 10 years – and assuming house prices will continue to rise – there could be 2.2 million people living in multi-family households and 3.8 million 21–34-year olds living with their parents by 2025.

Family Business Succession and the Need for a Plan


Let’s move away from Brexit and politics this week, as I am sure we are all fed up with the lack of a plan, and look at one of my favourite subjects – family businesses and succession planning.

Succession planning is one of the major hurdles in helping to build and maintain a family business. The complicated nature of family relationships in a business can make succession planning an emotional process. For the senior generation, acknowledgement of the inevitable can be difficult but for one reason or another they will become less capable in running the business. A good succession plan enables the leadership of the business to be passed on seamlessly from one generation to another.

Break on Through to the other side ….


What a couple of weeks it has been …. It was Lenin that said “that sometimes not a lot happens in a decade but then a decade happens in a week”

Our post Brexit Blog “Brexit and Your Investments” highlighted our belief that our investment portfolios were well placed to weather the storm of the uncertainty.  Our approach is to have a well-diversified portfolio with the defence of owning short-dated bonds.

Brexit and your Investments


With the referendum result now known, short-term panic in the financial markets is likely and this is something we alluded to in previous blogs. The risks of investing in the markets may seem material, but they are limited if your investments are robustly structured and well-diversified.

Advent of crowdfunding


One of the main innovations in both finance and technology over the past few years has been the advent of crowdfunding.

Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money. Financing a business, project or venture in the past typically involved asking a few people for large sums of money, but crowdfunding switches this idea around.

Politics and Investment


“It promises to be a nervous week for global markets as trader’s mull over the relative performances of the US presidential candidates. With no clear favourite, the US stock market is unlikely to find any clear direction until the winner is named.”

Does that sound familiar? That line from an article by the Reuters news agency was carried in newspapers around the world. Last week? Last month? No. In fact, that article is from September, 1988 and was about the Bush-Dukakis debates of that year.

As in the 2016 campaign, that election pitted two non-incumbents against each other as President Reagan completed his requisite two terms. As 1988 began, the New York Times/CBS News Poll talked of a political mood of “drift and uncertainty”.

This isn’t to imply that every campaign is the same, but it does serve as a reminder that markets regularly navigate political uncertainty. As for supposed “patterns” in election years, research shows 12-month results are strikingly similar to overall averages.

The US is not the only country holding national elections or referendums this year. Closer to home, we in the United Kingdom vote on June 23 in a referendum on whether Britain stays in the 28-member European Union. The remain campaign has warned voters of a possible recession should they opt for a “Brexit”.

So is Australia, where again, two party leaders with no experience of leading a campaign are vying for a lower house majority in a race which pollsters say is too close to call. Prime Minister Malcolm Turnbull, leading the Liberal National Coalition, and Bill Shorten, leading the opposition Labour Party, are standing on diametrically opposed platforms—the former promising corporate tax cuts and the latter more spending on health and education.

In the Philippines, a new president and self-declared “strongman”, Rodrigo Duterte, has come to power advocating extra-judicial killings to stamp out crime and drugs.

What do all these events mean for equity markets, for government bonds, for commodities and for currencies?

Those kinds of questions get a real workout at these times in the financial media, which inevitably finds a wide divergence of opinion from market observers.

Figure 1 shows the performance of the S&P 500 in 22US election years dating back to 1928.

Politics and investments

You can see in four of those years, the market fell. In the other 18 instances, it rose. But the truth is this sample size is too small to make any definitive conclusions. And, in any case, it is extremely hard to extract the political from other influences on markets.

For example, the worst annual market outcome during a US presidential year in this sample was 2008 when Barrack Obama defeated Republican nominee John McCain. But if you recall that was also the year of the collapse of Lehman Brothers and the global financial crisis.

Another down year for the market was 2000, the year Republican George W Bush defeated Democrat Al Gore in a tight contest. But that was also the year of the collapse of the bull market in technology stocks, the so-called “tech wreck”.

The point is that at any one time markets are being influenced by a myriad of signals and events— economic indicators, earnings news, technological change, trends in consumption and investment, regulatory and policy developments and geopolitical news, to name a few.

So even if you knew ahead of time the outcome of an election in one country, how would you know that events elsewhere would not take greater prominence for the markets?

Keep in mind, also, that elections have a limited range of possible outcomes—a clear win for candidate or party ‘A’ or ‘B’, or an inconclusive result. Markets will adjust ahead of time to deal with risks around these outcomes. And the degree to which they move on the result will often depend on how much it varies from the consensus expectation.

So while we have responsibilities as citizens to take an interest in elections, it is by no means clear that these events have long-term implications for our decisions as investors.

That is much more a matter of our own goals and risk appetites, our investment horizons, the structure of our portfolios, our degree of diversification and the costs we pay.

While many people will have a keen interest in political outcomes, academic studies show little pattern in actual market returns during election years.

The value of great financial planning


Pretty much everyone we deal with worries about time, money and the decisions they make. Proper financial planning is the key to resolving these issues. A number of clients we have been introduced to have, in the past, approached a financial planner for advice and been sold commission laden products. Fortunately, these days many financial planners provide good quality financial advice which doesn’t rely upon the sale of a financial product.

Many people don’t know what true financial planning is, or how this could help them. Rather than put together a few clever words to explain this, it’s better to consider the questions financial planning aims to answer. Here are a few examples:

  • Will we be able to maintain our standard of living?
  • When will I be able to retire or, more importantly, achieve financial freedom?
  • Will we need to downsize our property or sell other assets to live the life we want?
  • What happens if one or both of us require long-term care?
  • What is the position if one of us dies?
  • Can we help support our children and grandchildren?
  • What happens if there is a fall in investment returns?

Good financial planning helps to resolve many of these issues as it can provide clients with the confidence that they have the financial flexibility to survive whatever life and the markets throw at them.

It’s also comforting to know they have a trusted financial expert who understands both the client and their family’s circumstances and goals, who will review their finances over time and help them make the tough decisions they will almost certainly face. Lifetime cash flows, properly structured portfolios, tax efficiency and contingency planning are all areas which a good quality financial planner will use to help build a proper financial plan.

We look to build a long-term relationship from when you arrive with a bag full of the financial products that you have bought (or been sold) over the years to such time when these have all been analysed, improved upon if necessary and the initial financial plan implemented.  The annual review meeting will be more than a discussion about the last 12 months of market noise and will focus on whether you continue to be on the right track. Meeting your financial and lifestyle goals is what it’s all about and having the confidence to enjoy the opportunities that your wealth allows is what really matters.

The greatest wealth is your peace of mind and that’s what financial planning is really about.