Klopp it

Dominic Thomas
April 2024 • 4 min read

Klopp it

Klopp’s kids beat a Chelsea team that cost a billion to win the League Cup final, confirming belief that Jurgen Klopp is a marvellous manager, one that Liverpool should not let go. I think you would agree that this probably fairly reflects the sentiment across most media platforms following Liverpool’s 1-0 victory over Chelsea.

If you don’t like football, like Ted Lasso, this is not really about football. Stay with me.

Any manager has to select players from his/her squad from those available (not injured). Jurgen Klopp selected a team based on his own criteria, but suffice to say not all the regular stars were available due to injury. As a result, he had to look beyond the familiar, to the rising stars, untested for a big occasion. By the end of the match which predictably went into extra time, there were five Liverpool players under the age of 20 on the pitch bringing the average age of the 11 on the pitch to under 22.

There has been much praise for this bold approach and the legacy that the departing manager will have provided, a future that looks exceedingly bright. Credit where it is due, it was indeed an impressive result, though I think it fair to say that Chelsea are not at their best. However, the ages of players, cost and who won are not the issues here.

The tendency of the media is to move towards extremes, failing to retain a level head, seemingly stuck in an adolescent state of black or white. Much is being made of the success of Liverpool’s youngsters with euphoric sentiments about the future.

It is perfectly possible that Liverpool’s young players go on to have very successful (trophy winning) careers, but it also depends on undeniable luck. Skill as an athlete is the entry price, but luck will often feature. I mean luck in avoiding injury, having sufficient stability, opportunity to play. Typically players retire at around 35. James Milner is currently 38 and playing for Brighton, having moved from Liverpool at the end of the last season. He is one of the oldest and most successful premier league players. He was born in 1986 and his six minute Boxing Day debut for Leeds made him the second youngest premier league debutant, just nine days before his 17^th birthday. Milner has won lots and has the second highest number of Premier League appearances and is closing in on the record of 653.

Milner, like most athletes, does what he can to ensure he stays fit and skilled, but he has also been lucky with his fitness that has enabled him to continue playing and moving between teams that have a real prospect of winning (Manchester City and Liverpool since 2010).

Football pundits and commentators tend to forget luck, they forget survivor bias and often make statements with such a degree of certainty as a voice of authority, that many or perhaps most assume them correct. In the end they may be, but it’s unknown and bluntly, unlikely.

Investing is the same. We all see charts on billboards, newspapers or the internet showing how wonderful a particular investor is. There is no guarantee at all that this will continue or be repeated. Certainly they may have a good succession program in place, or assistants making the results more collaborative, but the truth is that we simply don’t know how much was luck and good health (investment managers also get ill, cancer, stroke, mental health issues and so on). Many or most investors elect for the belief that it is possible to consistently beat the market … denial of reality is a thing.

When James Milner made his debut at Leeds in 2002, Liverpool’s most successful period was already in decline, indeed they had never won the Premier League in his entire career until he helped them do so in 2020 some 30 years since their last League win (a record that their arch rivals Manchester United hope they do not match, but are now approaching halfway).

Sport is fickle, so is investing. As much as we would prefer not to acknowledge it, preferring to believe that we make our own luck – or where opportunity meets preparedness. Luck is part of the reality.

That’s why we avoid costly investment strategies that rely on the luck of a Manager. Over a reasonable time, one that is the real experience of investors like you, only about 5% of managers beat the market. So are you willing to bet your family’s wealth in 2024 on who they will be by 2044?… and pay a hefty premium for the privilege?

No, neither are we. At this point I cannot even tell you who will win this season’s Premier League which is over halfway through and concluding this Summer …

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Klopp itJemima Thomas2024-04-04T15:15:37+01:00

Timing isn’t everything

Daniel Liddicott
Jan 2024 • 6 min read

Timing isn’t everything

Despite a relatively rocky 2023, according to data provided by Timeline, global stock markets produced returns of around 15% for investors for the calendar year, attributed largely to a positive surge in performance over the last few months.

Consequentially, the end of 2023 saw UK investors flock back towards investing in equities as a reaction to their strong performance to end the year. As explained by the Calastone Fund Flow Index (FFI), this followed six months of a vast number of investors selling from equity funds between May and October 2023. Despite this, £449m was invested back into equity funds in November 2023.¹

Investors who decided to put their money back into equities at that time essentially chose to buy shares at a higher price than was available throughout the majority of 2023. This got me thinking – is there any other scenario in which people would be happier to purchase something when its price is potentially at its highest? So far, I have not been able to come up with anything! I mean, you wouldn’t wait to buy toilet roll until the price goes up, would you?

For the casual investor, the news and media are the main drivers behind deciding whether or not to invest in equities, painting extreme pictures of negativity and “never before seen” tanking of the market as a whole that will surely never recover – (SPOILER ALERT) even if this is not the truth. Whilst past market performance is no guarantee of future results, historically recovery has always followed periods of poor returns for equities. In reality, aside from taking information from the news, it would take a great deal of time, effort and resources to research market trends, to find and invest in equities that you believe are about to rise in value and help you to attempt to beat the market. This is where active fund managers come in.

SPIVA are a Standard & Poors (S&P) agency who monitor the performance of active funds and their managers against the major global stock markets. According to their data, only 7.81% of active fund managers in the United States were able to beat the market (S&P 500) over the last 15-years*. This trend can be seen for all regions that SPIVA gather data on, including Europe and the UK. Whilst the outlook for active fund managers improves over a one-year period (rising to 39.10% of managers beating the market in the US), consistent replication of these results is apparently impossible for the overwhelming majority. And these fund managers are afforded the time, effort and resources that I alluded to earlier, whilst still achieving poor results for those who invest in their funds.

The Timeline portfolios that the majority of our clients are invested in are called tracker funds. These essentially track the major global stock markets, aiming to achieve as close to market returns as possible with the aim of beating inflation, rather than beating the market itself. If you can’t beat them, join them! After all, we are trying to ensure that your money maintains the same purchasing power for decades in the future, to which inflation is the primary threat. The UK’s main stock market index, the FTSE 100, averaged an annual return of 7.3% from 1993 to 2023, with the average annual growth of inflation sitting at only 2.1% over the same period². The FTSE 100 provided average annual returns that more than tripled the growth of inflation. We believe that equities are the asset of choice when it comes to beating inflation over a long period of time.

If you have met with Dominic or myself in the recent past, you may have heard us refer to the importance of “time in” the market rather than “timing” the market. Leaving funds invested in equities for a prolonged period of time, which we would normally define as at least five years, affords your investments the time to recover from the inevitable, periodic falls that are certain to happen. It’s our job to help you “stay in your seat”, stick to your financial plan and remind you that these phases will come and go, just as they always have. Warren Buffett, often considered the most successful investor of all time, once said: “Wall Street makes its money on activity. You make your money on inactivity… it’s just not necessary to do extraordinary things to get extraordinary results.”

*Figures correct as at 18/01/2024

¹ Equity funds gather £449m inflows after six months of net selling (investmentweek.co.uk)

² How to invest to beat inflation – Times Money Mentor (thetimes.co.uk)

SPIVA | S&P Dow Jones Indices (spglobal.com)

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Timing isn’t everythingJemima Thomas2024-02-01T09:20:30+00:00

Royalty Income

Dominic Thomas
Dec 2023 • 1 min read

Royalty Income

For those of you who are business minded or ‘entrepreneurial’ (perhaps the most overused business word), the ‘rules’ around royalty income may be changing.

In recent decades we have all seen, particularly in the arts, how doing your work once and then getting paid repeatedly for it is the most honest definition of a ‘passive income’.

This is most evident in the music and film sector where stars of the past continue to earn income from repeats, resales, commissions and so on of a performance long ago. In fact I think it was George Lucas and his Star Wars franchise that really brought this to most people’s attention.

Imagine, you worked hard, made an album or wrote a book and forty years later you are still collecting money for your labour. Some of our clients are in this happy position.

So the twist is that this appears to be changing, well for some anyway. Various financially successful artists have been selling their back catalogue for a single, substantial lump sum, forfeiting the future royalties.

I wonder what this suggests? Perhaps that they would prefer to have the lump sum to spend, invest or gift rather than a lifetime of income. Perhaps they are concerned about the ability and resources to prevent plagiarism in the future or to restrict the use of their materials in other ways. Perhaps they are concerned that AI will actually make them irrelevant. I don’t know why, but it’s certainly an unexpected change to the basic business model in some sectors.

In September we learned that pop princess Katy Perry has agreed a deal to sell her back catalogue for around $225m. Her actor husband Orlando Bloom played Will Turner in Pirates of the Caribbean, so no need for bootleg albums for Katy (or perhaps bootstrap albums, with such a load of pieces of eight).

Katy Perry reportedly makes $225m by selling her music catalogue: https://www.bbc.co.uk/news/entertainment-arts-66853047

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Royalty IncomeJemima Thomas2023-12-17T13:36:40+00:00

How long are you investing?

Dominic Thomas
Feb 2023 • 8 min read

How long are you really investing?

As you know, we use a risk profiling tool, indeed if you have been a client for some years you will know that these have evolved over time. These all tend to test how you feel about investment loss. It’s a bit like throwing a snake into someone’s lap and asking them how they feel about snakes.

In all my time as an adviser I have never met anyone that likes to see the value of their investments reduce. Yet of course they do from time to time – and time is the key word, or perhaps concept.

Investment returns come from companies providing “solutions” to society at large. This results in products and services being sold for a profit and investors in those companies share the rewards of the endeavour. Wherever you are now, take a moment to consider all the things in front of you, to your left and right, including your attire, and perhaps the medication and food you have already ingested today. It’s made, but almost none of it is made by you.

Risky business?

Almost all investment theory works on the assumption that whatever can reduce in value the most is more “risky”. Cash tends not to reduce in value much, except for the impact of inflation or the bank failing. Shares can alter in price dramatically in the course of a few hours. So to simplify, shares are classified as high risk and cash low risk, with Bonds (and there are numerous types) classified as a little higher risk than cash as they provide return of capital and fixed income, much like cash.

Getting the balance between how much you should hold in cash, bonds and shares will dictate your returns (we call this asset allocation). How long you invest for is also a key part of the results. Unfortunately we live in a world obsessed with the short-term and immediate, yet you will almost certainly be investing for the remainder of your life, which I hope is a rather long time.

The interactive chart below shows 1 year returns, 5, 10 and 20 year returns with increased allocation towards shares from Bonds. In this instance the chart uses purely UK data for UK shares and UK Bonds, our portfolios are actually global, but this will hopefully provide some help with long-term thinking and what “risk” really is.

Figures reflect back-tested data for the period 1926-2020. In cases where the minimum return is a positive number, the red bar still portrays the min return but with a positive percentage.

You can draw your own conclusions, using the intelligence bestowed upon you, or you can listen to the the latest ideas about what will happen in the next 12 months, I would advise and suggest taking a much longer-term approach. For the record, the UK stock market is only about 5%-7% of the world stock market, depending on the value of the pound, which is why our clients invest globally.

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How long are you investing?Jemima Thomas2023-12-01T12:12:37+00:00

Tax year ending

Dominic Thomas
Feb 2023 • 12 min read

Tax year ending!

There are not many weeks left of the 22/23 tax year, which ends on Wednesday 5^th April. As a brief reminder of the key issues, I have done a quick summary … if you are not sure of what you have used or what you can use, please get in touch with us as soon as you can.

PENSIONS

Everyone under the age of 75 can contribute £2,880 into a pension and get basic rate tax relief, irrespective of any income. This is as close as it gets to ‘money for nothing’
The annual allowance of £40,000 applies to those with incomes of £3,600 – £240,000. You and an employer may contribute up to 100% of your earned income (capped at £40,000) between you
Those earning over £240,000 need to be careful; your allowance reduces by £1 for every £2 of income over £240,000 until it reaches £4,000 – which includes any employer payments

ISAs – INDIVIDUAL SAVINGS ACCOUNTS

Any adult can invest up to £20,000 over the course of the tax year into an ISA which grows free of income tax and capital gains tax
Those aged 18-40 can use a Lifetime ISA allowance of £4,000 if this is for a deposit on a first ever home. The Government will add £1,000

CAPITAL GAINS

If you are selling an asset / investment (which would include rebalancing them) this triggers capital gains. The 22/23 allowance is £12,300 of gains before you pay any tax, but this is falling in 23/24 to just £6,000 and then £3,000 the following tax year. So if you are going to do this anyway, I would encourage you to get on with it – perhaps you have some shares that you don’t really want …
Trusts also pay capital gains, but only have half of the personal allowance, so even more incentive to take profits and rebalance
You can delay payment of capital gains tax using some investments (ask/see below)

INCOME

If your income exceeds £100,000, you begin to have your personal allowance of £12,570 reduced by 50p for every £1 above £100,000. The personal allowance is the amount of income taxed at 0%. So it would be prudent to have bonuses paid into pensions for example
Dividends – the first £2,000 of dividends is tax-free in 22/23
Interest for non or basic rate taxpayers is 0% on the first £1,000 of interest (savings allowance) and £500 for higher rate taxpayers. Additional rate (45%) taxpayers don’t get the allowance. As some deposit accounts now pay 3% or 4%, you may be drawn into this (a higher rate taxpayer only needs £16,666 in savings earning 3% interest of £499. You need to declare all income to HMRC through self assessment
If you really must insist on a cash ISA (please only for ‘short-term parking’ of money) then this would ensure the interest is tax-free, but rates on cash ISAs are much lower than savings accounts now
If you are not using your full personal allowance and have investments that provide taxable income, this may be a sensible moment to trigger income that uses your allowance
If you rent a room in your home, there is a tax-free rent-a-room allowance of £7,500

ANNUAL GIVING

You can gift £3,000 to any individual without recourse to tax by the recipient or your estate. If you do any substantial giving please put a scan of a signed note of this on our portal
If you are feeling generous, you are also permitted to gift your newlywed children £5,000 or grandchildren £2,500

SPOUSE ALLOWANCES

If you have a spouse who does not earn up to the personal allowance of £12,570, you can elect to have 10% of this (£1,257) added to your own allowance
Spouses also can benefit from sharing assets and effectively doubling exemptions and allowances

ALTERNATIVES & HIGH-RISK INVESTING

It is generally thought that VCTs, EIS and SEIS are really for more sophisticated investors, about 3% of the population. All are long term in nature – meaning 6-10 years. Unlike your portfolio elsewhere (which – if we are managing it – will be an enormous portfolio of global equities), these are very small by comparison. Do not do these on your own unless you know your Sharpe ratio from your Beta. Unlike the above, the investments below can experience permanent loss:

Venture Capital Trusts

Tax-free income from your investment
Tax-free capital gains
Tax relief of 30% on your initial investment (tax reducer)

Enterprise Investment Schemes

30% tax relief on your investment
The ability to defer owed capital gains tax
Loss relief
Exempt from inheritance tax

Seed Enterprise Investment Schemes

50% tax relief on your investment
Reduce your due capital gains tax bill by 50% immediately
Exempt from inheritance tax

DON’T FORGET

Income taxes are tiered. Each slice of your income is taxed at a different rate.

Band	Taxable income	Tax rate
Personal Allowance	Up to £12,570	0%
Basic rate	£12,571 to £50,270	20%
Higher rate	£50,271 to £150,000	40%
Additional rate	over £150,000	45%

Please remember that HMRC will apply penalties for late payment and fines for non-payment which can result in the very worst of punitive measures – a custodial sentence.

As ever, be sure of two things – death and taxes. Neither are terribly welcome.

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Tax year endingJemima Thomas2023-12-01T12:12:37+00:00

New year, new me and all that

Jemima Thomas
Jan 2023 • 4 min read

New year, new me and all that…

This year I decided to do a ‘semi-dry’ January. I’m not one for resolutions usually, but after a Christmas spent both in London and Manchester filled with seeing lots of friends and family, there was a fair amount of celebratory gatherings I was a part of, and it would be nice to start the year feeling lighter both mentally and physically (as well as saving a bit of money this month!).

When it comes to changing habits, I’ve learnt that stopping anything abruptly and going ‘cold-turkey’ never works for me. It always feels like I’m punishing myself when I’m effectively trying to ‘better’ myself, which makes no sense at all. If I want to cut down on something, weening myself off is the most doable (for me at least).

That being said, by the second half of 2022 I was putting away larger amounts into my savings than usual. I had set myself a realistic goal, and even with all the fun winter festivities going on, I’m proud I kept at it. I’d be lying however, if I didn’t acknowledge that I did feel some guilt and a little sadness by doing it. I like to splurge on my loved ones, and I’m annoyingly a ‘yes person’ especially when it comes to an event that involves all my friends. But this Christmas … I resisted. I stuck to my budget on how much I’d spend on each person and I didn’t waver, I turned down (a few) more excessive meals or theatre shows, and I prioritised what was most important.

As someone who’s not a great saver, this is all a pretty huge deal, and I have no regrets on sticking to my guns. I won’t hide the fact that compromising my lifestyle can sometimes be harder than I would like. Of course I could make it easier by putting away less, but knowing that my future self will be in a better position has made the compromises a positive move. I hope I’ll feel the same in February after I’ve had fewer gins and tonic.

I value and respect those who are honest about their experiences when it comes to compromising, as we all do it often in life (in our relationships, our finances, our work etc). It’s making sure that these compromises are worth the long-term goal. If they’re not, a readjustment is needed. This is why here at Solomon’s we strive to ensure that our clients feel comfortable and positive in long-term planning, because the fruits of the compromise can be golden.

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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New year, new me and all thatJemima Thomas2023-12-01T12:12:39+00:00

Purpose – how to plan…

I have shelves of books about financial planning, investing and anything that helps me to improve how I do what I do and how to simplify, explain and address issues that actually matter to you our clients.

One of the lessons that I have learned over the last three decades is that planning for the future is often too far into the future to be meaningful. We all hope to have a rewarding, purposeful and enjoyable life, but thinking about the next thirty years (2052) often feels too distant from the present.

TIME TRAVEL

As I write, it is November 2022, and looking backwards is easier. Three decades ago (November 1992) is the same distance backwards as it is forwards to 2052. Back in 1992 we had just had the ERM crisis, unemployment was 2.7m, Charles & Diana were still unhappily married. The same time traveller distance back to November 1962 and 007 premiered Dr No and Z-Cars was first aired. The Cuban Missile Crisis had just happened, and The Beatles had just released their first single ‘Love Me Do’.

Suffice to say thirty years is a long time and much changes, though most of it is barely noticed on a day-to-day basis. As humans we tend to have short memories, often having to relearn the same lessons.

The cashflow modelling that we have been using with you since it was available, suffers from the same problem, projecting decades out into the future. Of course, I remind you that “this is a version of the future that almost certainly will not happen, as life is not linear and stuff happens” or something along those lines.

On the one hand I need to extol the rationale, logic and purpose of having a long-term mindset, and on the other I am aware that we really cannot predict anything. The last five years were probably unthinkable to most of us decade ago.

So we focus on the gradual accumulation of small changes that all add up to a better future. Taking advantage of improvements in technology, lower charges and efficiencies. Yet I still find the daily use of pad and paper something that I am unlikely to give up easily. Even holding a printed document is better than a pdf.

Planning ahead for me means considering the year, quarters, weeks and days. I use a planner and despite all the workflows and tech, the planner is really my personal account and guide. This is really a place for my values and aspirations or goals both personally and for the business. The self-accounting enables me to not simply get things done, but to get the important things done… or at least progressed.

Quarterly planning is nothing to do with investment valuations or market conditions, but ensuring you are taking action to progress towards your goals whilst living out your own values consistently and authentically. Planning with purpose.

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Purpose – how to plan…Jemima Thomas2023-12-01T12:12:42+00:00

WHY LONG TERM INVESTING IS CRUCIAL

TODAY’S BLOG

I came across this article by David Booth, the founder of Dimensional Fund Advisors in the US and I think it fair to say, one of the giants within the investment community. I think he has found a great way of outlining the problem of uncertainty. Whilst the references are American, this doesn’t detract from the message.

WORRIED ABOUT STOCKS? WHY LONG-TERM INVESTING IS CRUCIAL…

We are living in a time of extreme uncertainty and the anxiety that comes along with it. Against the backdrop of war, humanitarian crisis, and economic hardship, it’s natural to wonder what effect these world events will have on our long-term investment performance.

While these challenges certainly warrant our attention and deep concern, they don’t have to be a reason to panic about markets when you’re focused on long-term investing.

Imagine it’s 25 years ago, 1997:

J.K. Rowling just published the first Harry Potter book.
General Motors is releasing the EV1, an electric car with a range of 60 miles.
The internet is in its infancy, Y2K looms, and everyone is worried about the Russian financial crisis.

A stranger offers to tell you what’s going to happen over the course of the next 25 years. Here’s the big question: Would you invest in the stock market knowing the following events were going to happen? And could you stay invested?

Asian contagion
Russian default
Tech collapse
9/11
Stocks’ “lost decade”
Great Recession
Global pandemic
Second Russian default

With everything I just mentioned, what would you have done? Gotten into the market? Gotten out? Increased your equity holdings? Decreased them?

Well, let’s look at what happened.

From January of 1997 to December of 2021, the US stock market returned, on average, 9.8% a year.

A dollar invested at the beginning of the period would be worth about $10.25 at the end of the period.

These returns are very much in line with what returns have been over the history of the stock market. How can that be? The market is doing its job. It’s science.

Investing in markets is uncertain. The role of markets is to price in that uncertainty. There were a lot of negative surprises over the past 25 years, but there were a lot of positive ones as well. The net result was a stock market return that seems very reasonable, even generous. It’s a tribute to human ingenuity that when negative forces pop up, people and companies respond and mobilize to get things back on track.

Human ingenuity created incredible innovations over the past 25 years. Plenty of things went wrong, but plenty of things went right. There’s always opportunity out there. Think about how different life is from the way it was in 1997: the way we work, the way we communicate, the way we live. For example, the gross domestic product of the US in 1997 was $8.6 trillion and grew to $23 trillion in 2021.

I am an eternal optimist, because I believe in people. I have an unshakable faith in human beings’ ability to deal with tough times. In 1997, few would have forecast a nearly 10% average return for the stock market. But that remarkable return was available to anyone who could open an investment account, buy a broad-market portfolio, and let the market do its job.

Investing in the stock market is always uncertain. Uncertainty never goes away. If it did, there wouldn’t be a stock market. It’s because of uncertainty that we have a positive premium when investing in stocks vs. relatively riskless assets. In my opinion, reaping the benefits of the stock market requires being a long-term investor.

By investing in a market portfolio, you’re not trying to figure out which stocks are going to thrive, and which aren’t going to be able to recover. You’re betting on human ingenuity to solve problems.

The pandemic was a big blow to the economy. But people, companies and markets adapt. That’s my worldview. Whatever the next blow we face, I have faith that we will meet the challenge in ways we can’t forecast.

I would never try to predict what might happen in the next 25 years. But I do believe the best investment strategy going forward is to keep in mind the lesson learned from that stranger back in 1997: Don’t panic. Invest for the long term.

Footnotes

In US dollars. S&P 500 Index annual returns 1997–2021. S&P data © 2022 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.
Data presented for the growth of $1 are hypothetical and assume reinvestment of income and no transaction costs or taxes. This value is for educational purposes only and is not indicative of any investment.

Dominic Thomas
Solomons IFA

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WHY LONG TERM INVESTING IS CRUCIALJemima Thomas2023-12-01T12:12:47+00:00

YOU ARE ALREADY READY – WIMBLEDON AND WINNERS

TODAY’S BLOG

YOU ARE ALREADY READY – WIMBLEDON AND WINNERS

I was watching the local tennis tournament in Wimbledon and for some reason a comment by the BBC commentator, John Inverdale struck a chord. It wasn’t a particularly unusual comment and nothing new, but for some reason it resonated, and I think he was spot on.

He said (and I may paraphrase)

“I was at Roehampton last week for the qualifying, I was interviewing one of the players that got through and asked: at match point, one point away from qualifying, what were you thinking? the answer was I wished I was anywhere but there… which is very different from a Champion who revels in such moments.

If you didn’t know who they were, you wouldn’t be able to tell the difference between most players, but it’s at the key moments, when the match is tantalisingly poised… invariably it’s the It’s the champion that’s been there more often who comes through.”

Apologies to Mr. Inverdale if I haven’t transcribed that perfectly. Anyway, if I understood correctly, he was really stating that winners seem to win more frequently because they are better in the tense moments. Something that I suspect we might all agree on.

YOU’VE GOT THIS…

It reminded me of a chart that I have been using with clients recently. We know that markets have been difficult or “volatile” this year. The histogram I have been discussing is this one.

In simple terms it shows the calendar year returns of the UK stock market from 1926 to 2021. Everything right of 0% (column 5) ending the year positively, to the left (the first four columns) – negatively. The good news is that since 1926 there have been rather more years of positive returns (72/96) or 75% of all years.

I’ve been considering how we all handle stock market crashes and I think its right to remind ourselves of the awful investing years that we have lived through… depending on when you became an investor (most of you would not have been investors (aged 18) before 1955). So it seems reasonable to point out that you have lived through more than your fair share of bad investment years… you’d have to be at least 67 to have been an adult investor in 1973 and 1974, two of the worst years, but I suspect most have experienced 1990, 1994, 2000, 2001, 2002, 2008, 2011, 2018, 2020. Returning to the tennis analogy, these were the tense, big moments. You held your nerve and survived. You are still here; you and your portfolio have survived.

The way media and arguably regulation presents investment is to focus on the negative years. We can agree and acknowledge that “bad years” for investors come around regularly – 1 in 4 is a negative year. We are all adults and know this. Whatever is thrown at us over the coming months you have the genuine life experience to fall back on. You have been here before. Hold fast and play the long game, progressing through your own journey to the final.

If you are concerned about your portfolio please get in touch with me. If you know someone that is, why not suggest that they get in touch too. The greats all have coaches, but talent is what you possess already. A coach seeks to maximise yours.

Dominic Thomas
Solomons IFA

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Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk
Call – 020 8542 8084

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YOU ARE ALREADY READY – WIMBLEDON AND WINNERSDominic2023-12-01T12:12:48+00:00

Money is not a peace of mind, it’s a choice

Jemima Thomas
May 2022 • 5 min read

Money is not peace of mind, it’s a choice

If you are looking for a gritty (anxiety inducing) series to binge, then Ozark on Netflix is for you. The series is about a financial adviser who drags his family from Chicago to the Missouri Ozarks, where he must launder money to appease a drug boss. So basically it’s a show about Solomon’s! (Please note this is very clearly a joke and we are not affiliated to this fictional TV series).

I was very pleased to see how many hits (yes, I stalk this on the regular) my first blog post ‘Slow and Steady’ got a few months ago, and I’m hoping that my youthful (and often under-represented) perspective will be mildly interesting to read again …

Amusing to some I’m sure, but I’ve always used the backdrop of art mediums such as film and TV to understand more about life, and there are a huge amount of personal parallels that resonated with me whilst watching Ozark. For one, the show is filled with financial lessons and quotes that have stuck with me. One of my favourites comes from lead character Marty: “Patience. Frugality. Sacrifice. When you boil it down, what do those three things have in common? Those are choices. Money is not peace of mind. Money is, at its essence that measure of a man’s choices.” For me this completely encompasses why we do what we do here at Solomon’s, and why great financial planning is so important.

Finding a good financial planner is a choice. And I truly believe it’s one of the best and often life-changing decisions you can make. Aside from the obvious differences of what Solomon’s does and what character Marty does (we aren’t laundering money, killing people, or secretly working for drug lords), we are however helping our clients invest their money wisely, something that I have begun to do myself. Perhaps I’m avidly searching for advice more often now both in ‘life’ and when it comes to my own finances, but I am acutely aware of the importance of having a financial plan.

Life isn’t always straightforward and is constantly changing, but some financial lessons are staple and vital in the long-run. Much like what happens to Marty and his family throughout each season, they are constantly having to adapt under severe life or death scenarios, and it’s eye-opening to see (although fictional) what people choose to do to save themselves financially.

Choices are also wrapped up in mistakes – mistakes are wrapped up in choices

Advice isn’t something I take lightly. I used to despise unwarranted advice, especially in my teenage years where I probably had a chip on my shoulder and felt most lost. But as I’m getting older, it’s something I welcome with open arms, and usually ask for. Other people’s mistakes often teach the biggest life lessons, and an open mind allows the space for us to learn from one another.

I get to read and listen to clients’ stories regularly as part of my work on Spotlight (our client magazine), and we often ask ‘’If you could go back and give your 20-year old self advice, what would it be?” and the responses are always helpful and interesting. When people feel comfortable and safe enough to talk about their financial mistakes (or any mistake for that matter), I am reminded that every day is a school day.

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Money is not a peace of mind, it’s a choiceJemima Thomas2023-12-01T12:12:50+00:00

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