The soothsayers and forecasters are at it again

Well, the year is drawing to a close and most people seem to be preparing for the Christmas festivities. A clear sign of age is feelings that Christmas seems to be coming around more quickly these days. As if unprompted, my email in-box is now being filled with lots of reports and tips for 2014. If I were wishing to pour scorn on these I would keep them and then send them back at the end of 12 months. Invariably these are nothing more than guesses, which will miss the surprises and restate the obvious. Glossy and earnest yes, but invariably a pointless exercise.  The point of investing and perhaps life, is that the future is not known, we are merely managing expectations and planning as best we can in a sensible fashion for what may or may not happen.

Lessons from history

For those of you that receive a birthday card from us, you will be familiar with the decade by decade summary of specific years. This has several purposes. Firstly it reminds us all that time is short, 10 or 20 years ago actually doesn’t seem that long ago when you recall information about what you were doing or what was happening in the world. Secondly it is a reminder that history has a tendency to repeat itself, not precisely, but closely. I can with a degree of confidence make a couple of predictions. That my predictive powers are no better and no worse than anyone else’s, that things will change but this won’t always occur as expected. Financial planning makes lots of assumptions which will be wrong, but are based on sensible, reasonable logic. That’s why it is important to review your planning, not because we are guessing, but because we need to adjust for what happens in reality.

Dominic Thomas: Solomons IFA