WONDERVISION

TODAY’S BLOG

WONDERVISION

Its not a typo, I am well aware that the latest Marvel series is WandaVision, which far from being about superpower, is all about the very real human feelings of grief and loss. So no, today I am not talking about that.

This morning (too late?) ok, so tomorrow morning when you wake up, I’d like you to think about how many companies have been involved in your morning routine. Let’s face it, morning routines have been fairly routine for months now, so this may require very little effort as many of us are on autopilot.

RISE AND OBSERVE

To the matter at hand. I am going to assume that you are waking in your bed, with a pillow in your own room. Can you remember where you bought these from? Or who made them? How about your bedside table, lamp, clock, book (and pen?) what about your nightwear, sheets, carpet? How much “stuff” can you observe that you have bought before you have even put a foot into your slippers or directly onto the floor? A surprising number already I imagine. Where is your smartphone at this point? Do you have lots of applications running?

The image below is one that I have been using recently, but it is very flawed, there are about 100 companies shown here, there are about 1600-1800 in the global equity part of your portfolio. So that’s about 5% of the list. Note the size and position of each logo means absolutely NOTHING.

SOLOMONS IFA - INVESTING 1800

X-RAY VISION

Now for the superpower, imagine that you have x-ray vision. You can see all the components of all the objects around you, the springs and stuffing in your bed, the wires and plumbing, the bricks, plaster, cement, the metal window locks, the PVC, glass, the screws, nuts and bolts. How about all those automatic things that are also supporting this modest existence of yours? The utility company, your broadband provider, your insurance policies, water supplier, your bank accounts and so on. A vast number right? So many you probably gave up or did not attempt to count.

Most of those products and services are provided by companies found listed on the world stock markets. They are also in your portfolio, no matter how big or small it may be. They are there. This is investing. Deploying your money to back businesses that we all use, many of which we do not even realise. Even with the huge rise in technology where you will be using software on hardware that perhaps you are so familiar with it does not even register until its replaced, upgraded or fails…much like (exactly like) all the things you have just observed.

You own a part of all of this. A small part, but your money is backing those companies to improve what they do. We all know that the future will be different, and some businesses will need to adapt to the changes or fail, but new ones will emerge for things that none of us can imagine clearly (if you can, please get backing (money) to make it).

This is what your investments do.

Should you wish to see the mini-series WandaVision about Wanda and Vision, it can be found on the Disney channel, another holding in your portfolio.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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WONDERVISION2021-03-16T08:48:52+00:00

Nucleus and James Hay

TODAY’S BLOG

NUCLEUS AND JAMES HAY

The world of Financial Services can often seem dull, but many of us that have been around for a little longer than a week are very familiar with the frequent merging of financial services companies. This morning it has been announced that Nucleus have accepted an offer to be acquired by the James Hay Group. Many of our clients have holdings on the Nucleus platform.

Change is unsettling, the reality is that we can never prevent change, we simply must face it. Nucleus is, to be blunt, a rather brilliant company that we have been using for many years. The technology works and the culture which in no small part directly derives from David Ferguson have been a beacon in my sector. One of integrity, innovation, and transparency.

James Hay is a very large financial services company that mainly specialises in pensions. We have always been able to use them for our clients. We review the platforms we use each year and this is based on various criteria from “does it work?” to financial resilience. In truth, it would be improbable that Nucleus remains your platform forever – technology will always evolve.

Nucleus and James Hay

THE EVOLUTION CONTINUES

On the face of it, this looks like a sensible and good deal, but as always, we will keep things under review. Should we advise something different, we will do so. However, at this stage that would seem highly unlikely. We will watch the usual criteria and hope, as I am sure both firms do, that 1+1=3 where there are improvements and advantages (such as price reductions for clients on either or both).

David Ferguson, the Nucleus CEO who I interviewed for our last edition of Spotlight, says

Since we launched in 2006 we’ve always put the customer centre stage and while that has made us a little bit different it’s carried us to £17.4 billion in AUA and to a point where the sentiment of our users and our people has never been better. Becoming part of this enlarged group gives us a key role in a much bigger story where we can create a leading independent platform of scale with a high tech, high touch proposition and philosophy. I think the combination of our people’s talents and the size of the opportunity can see us carefully navigate the roadmap to deliver on this collective medium-term goal. I look forward to getting to know our new colleagues and moulding a group culture that is centred on doing the right thing and building a market-defining product that really delivers for advisers and their clients.”

I remain open-minded and aware that change ushers in anxiety. There is nothing significant that has altered but in time we hope for improvements, if these are not forthcoming we shall of course review the platform we are using for you. Please also note that one of the many reasons for selecting Nucleus is that there are no exit penalties. It is my hope that this will simply be nothing more than an advantage.

In the interests of the absence of doubt, I have never directly owned shares in any financial services company. In the beginning advisers were very much part of the Nucleus set-up and it was a requirement for them to have some financial stake in the company as part of its backing. I felt that this was a potential conflict of interest and didn’t buy shares (so I do miss out on this deal). I believe that I was the first or certainly one of the first advisers that Nucleus permitted access without buying shares. I may be wrong on that, but that’s what I understood to be the case.

In summary – I am not concerned, if this changes we will make changes – as you would expect.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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Nucleus and James Hay2021-02-10T09:33:37+00:00

WHAT SHALL I DO ABOUT MY SHARES?

TODAY’S BLOG

WHAT SHALL I DO WITH MY SHARES?

First, let me be clear – I am not a stockbroker, I am not licensed to provide advice on specific shares. So, I cannot and will not advise the purchase of one share over another. What I can do is provide you with some generic information.

All proper investing will invest in shares. Today I am simply discussing investing directly into shares (i.e. you hold a piece of paper – that shows you have shares in XYZ company). The other way to invest in shares is via an investment fund.

ADVANTAGES OF SHARES

You can be specific about what you invest in. There are no ongoing charges for your shares if you hold them unless you do so via a trading platform which typically has monthly fees and specific minimums. You do your research, buy the shares, sell them when you want. Some provide a dividend (which is a taxable income and out of profits), some do not.

Diversification

DISADVANTAGES OF SHARES

Your money does not go very far. Today at the end of June 2020. The share price of Morrisons is £1.90, Sainsbury’s £2.09 and Tesco £2.29 to name three well known companies in the supermarket world. So you have £10,000 to invest, excluding any stockbroker charges (which there will be – for each trade (a purchase or sale of a particular share) you want to create your portfolio which you call Supermarket Sweepstake. I will not go into how or why you select shares, there are many people offering “tips” for free or at a price for rationale and research, but let me say that after 3 decades I can assure you that over the remainder of your life neither I nor anyone else will be able to successfully predict the who and what, but will also fail to consistently, repeatedly outperform the market through their research, genius and luck. Not a soul.

Anyway, back to my daft Supermarket Sweepstake, you think Sainsbury’s will outperform (over what period and why??) the other two but are not so convinced that you put all your £10,000 in just Sainsbury’s so you buy £4,000 worth of shares in Sainsbury’s and £3,000 in each of the others. This results in the following portfolio (roughly).

  • 1913 shares in Sainsbury’s
  • 1310 shares in Tesco
  • 1578 shares in Morrison’s

The above could be achieved with three trades or could be more than that if shares were bought gradually across a day or any other period. Every trade has a cost (and a tax).

I HOLD LOTS OF SHARES, SO I MUST BE RICH…

You hold “a lot” of shares, but you only hold them in three companies and in my rather daft example you hold them all in the food retail sector. This is an example of extreme concentration risk – just 3 actual companies, all doing the same thing,  in the same sector, in the same country. If for any reason supermarkets cannot operate as normal, you will likely see a reduction in their value – or of course other competitors make their trading life rather harder.

Income from the dividends is taxed. If you sell the shares the gains are taxed (though the gain may be within your capital gains tax allowance).

WHY A FUND?

A fund, particularly a fund made up of the entire index, will hold all the shares in the index. If that is regional or specific (i.e. FTSE 100) then it will hold some of all those companies. A global index will hold the lot (pretty much). In the case of the FTSE 100, that is 100 companies, as for a global index – well thousands of companies.

The downside of a fund is that someone is managing it, ensuring that it sticks to its mandate. The cost of management can vary enormously, part of an adviser’s job is to select funds that are suitable for you and cost is an element of the criteria used. For example a good fund we use costs about 0.22% of £10,000 that’s £22 for the year most funds however charge much more and some charge a bit less. As the size of the fund grows the investment costs are more – because they are a percentage.

That said, a comparable stockbroker service is also managing the portfolio, they many be remunerated on trades (an incentive to  constantly change stuff) or performance [or both!] – in which case they may be rewarded for high returns from highly concentrated holdings, but not penalised for low or negative ones… which leads to the inevitable conclusion by the nice gent in the suit to take quite a punt with your hard earned loot, no reason not to is there old chap?

DIVERSIFICATION

The main purpose of the fund is that is provides diversification – holding hundreds or thousands of companies as shares. Some will also hold other types of assets too, depending on what the fund is attempting to achieve.

Both the funds or directly held shares are subject to taxes – on gains and on income. A sensible thing to do would be to put these into an ISA – which is really nothing more than a wrapper that makes the contents tax free.

These days most stockbrokers will need a minimum of £250,000 to build a diversified portfolio of shares, but even then, it is likely that they will use funds. That is because it is hard to get the benefits of diversification without a reasonably large amount of money.

Diversification is really shorthand for “spreading risk” – adhering to the adage – “don’t keep all your eggs in one basket”. This helps dramatically reduce the likelihood of total loss. Holding shares in just three companies that all went out of business would be a total loss, the chance of every company going out of business across global stock markets – well that’s the apocalypse and you will not be worrying about your portfolio.

FINAL NOTE

I am not against you having a small amount of money to play with, an amount that you can afford to see disappear. You can sign up for any trading platform you like, do your research. My only tip is to stick to the industry or sector you know about (your own). Muck around to your hearts content, but do not show me your numbers or genius, it will fade. Everything reverts to mean (average).

I have never watched Supermarket Sweep but I did find this rather old clip from the US show. To my strange mind it is full of metaphors about investing and the mania some display about markets. At the end of this, you need to satisfy your own goals, not those of your peers, friends, markets, media or anyone else, its your life, it needs to be your plan.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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WHAT SHALL I DO ABOUT MY SHARES?2020-06-30T18:20:18+01:00

JUST THE FACTS?

TODAY’S BLOG

JUST THE FACTS

One of the big electronic billboards that I pass on the way to and from the office has an advert for a London radio station with the strapline “Just The Facts – Headlines Every 20 Minutes”. I’m not against facts, quite the reverse, however they are never in isolation (unlike many of us now).

The facts are truths, but they always require a context. We know this of course, but in an age of constant bombardment of anything either audio, visual or both we are so assaulted by a stream of imagery that we are often left to engage with it in its rawest and poorest form – without a context.

We are all deeply concerned, alarmed and bewildered at some of the scenes we have witnessed lately, particularly in the supermarkets. Then of course there are the stock markets where the same panic has been rife. The incredible thing about this is the speed at which society seems to implode.

YOUTH GROUP 2007

DO YOU BELIEVE WHAT YOU SEE?

However, as of right now, I wonder if my last sentence is even vaguely true. Society has not imploded, people that I interact with on social media, peers, clients, industry bods, anyone, all seem to have the same bewilderment. They also have the same determination to do what they can to help each other, the exact opposite of the majority of the images we see.

I SEE ALIVE PEOPLE

I am a huge believer in people, in my time I spent many years leading youthwork in my free time. The thing I like about young people is that your input has fairly prompt results and they have a longer future (hopefully) ahead of them. Whilst for a teenager, everything feels like an eternity, it’s all over within a few years. The picture above was taken in the summer of 2007, (that’s me in the corner on the phone) when we took part of the youth group to a festival. Two of them are both due to get married this summer. We’ve been invited but sadly one, perhaps both of them might need to rearrange or adjust their plans given the current pandemic. I’m sure that is disappointing, frustrating and possibly expensive, but they are robust and happy together, more focused on the years ahead together than on the first official day…

COMMUNITY RESPONSES

The road I live on has just started a WhatsApp group. It goes without saying that some of the residents had never heard of WhatsApp. We moved to the area nearly 4 years ago and know a handful of people around us, but suddenly we have all been introduced to each other. Call me sentimental, but I think that’s rather a good thing – the premise has been to help those most impacted and vulnerable with shopping and so forth, but I dare say it will be rather more far reaching.

ALL IS NOT LOST – LOOK AHEAD

So, the markets have fallen. We have all “lost money” (we have not lost money, the value of the assets we own has temporarily reduced – that is all). This is uncomfortable, I don’t wish to understate the problems, but there are already lots of positive and encouraging signs – you just need to look in the right places.

I’m here, still minding the fort and building the bridges and looking forward to tomorrow.  Feel free to get in touch, comment, ask a question, pick up the phone or ask for an online meeting. I will do my best for you.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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JUST THE FACTS?2020-03-20T17:05:57+00:00

A TRANSFORMED INVESTOR

TODAY’S BLOG

A TRANSFORMED INVESTOR

I came across this article which may be of some help to you. Dave Goetsch one of the executive producers of the hugely successful “Big Bang Theory”, who wrote a piece for Dimensional, one of our investment partners. This is his experience…

Seeing all the recent headlines about the sudden downturn in the stock market has transported me back to February of 2009, when I was close to despair. It’s striking how different I feel now.

In February 2009, the stock market was down around 50% from its high, and everyone seemed to feel like the sky was falling. I was familiar with this state of panic because my relationship to the financial markets was that I didn’t trust them.

They were always going up and down in ways no one could predict, and I couldn’t trust those folks who said that they could anticipate what was going to happen. So when the market went down, I went down with it—sinking into a depression, knowing there was nothing I could do. What a difference nine years make. I haven’t changed because the stock market rebounded. I changed because I learned that there was a different way to think about investing. I was right not to trust those people who thought they could predict what was going to happen in the markets, but I was wrong in thinking that there was nothing to do. I’ve learned that I can have a great investment experience if I just accept a few simple truths.

DAVE GOETSCH

I have to understand the uncertainty of the market. The stock market, as measured by the S&P 500 Index, has returned about 10% per year over the last 90 years, but there are very few individual years in which it has ever actually returned that amount. In fact, how many of those 90 years do you think the S&P 500 was up more than 20% or down more than 20% for that year? The answer is 40. Astounding, right? I wish somebody had explained that to me decades ago. Then I would have known to look at stock market returns in terms of decades—not years, months, days, or hours. I would understand that so many of those articles and cable news pieces are just noise, designed to keep an audience obsessed and unsettled.

I haven’t changed because the stock market rebounded. I changed because I learned that there was a different way to think about investing.

In order to be a long-term investor, you have to have a long time horizon. This can be hard to remember when you’re being assaulted by noise, but if you can stay strong, the results are stunning. By results, I don’t mean the investment returns, which hopefully are good. The return I’m talking about is how I feel every day. I worry less—not just about the future, but also about the present. Of course, I know that there are no guarantees when it comes to investing, but I feel like I’m going to be okay. I have a plan.

There’s no way I could’ve done this without a financial advisor. I needed someone who could not just talk me through what my asset allocation should be, but also help me work through how I felt about investing and what exactly I could do to change my perspective.

I was a mess nine years ago. Now, my outlook is totally different. The markets haven’t changed; they still go up and down. The difference is, I don’t anymore.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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A TRANSFORMED INVESTOR2020-03-13T12:58:58+00:00

THE PERFECT MARKET TIMING?

TODAY’S BLOG

THE PERFECT MARKET TIMING?

We all know that Brexit has caused great division and frustration, whichever side of the “argument” that you are on. It has resulted in many people delaying decisions, attempting to time the market right. Many people are putting off large purchases until there is greater clarity about the future.

This is true too of many investors. One of the great benefits of a democracy is that we can have access to information about markets. However, this is invariably used very poorly. Investors (professional and “amateur”) attempt to invest during the ideal period and of course sell their investment at an equally ideal time. This strategy may work on occasion but is impossible to repeat in any sustainable way.

Let us look at the US experience. Why? Because the US market is about 54% of the global stock market by value. It is a mature market and a well-regulated one. JP Morgan have produced a great graphic about the flows or money in and out of funds. The blue spikes represent money moving into investments (above the line) and out of them (below). These are net inflows (or outflows).

JPMorgan research Market Timing US

The market falls, investors run

They (JP Morgan) then overlaid the US S&P 500 index. The result is startling. As markets fell, investors bailed out. Most money was taken out of funds at the bottom of market “crashes”. Most investments tend to be made at the market peaks. Investors are quite literally doing the opposite of what they have been told. They buy high and sell low. They know that they shouldn’t do this, but they cannot help themselves because of fear about the future.

Here is the newsflash. When markets crash, the media is full of disaster stories, this invokes a sense of dread and fear, which investors take as a call to get out of the market, sell, sell, sell… Once the crash is over investors return, usually once most of the gains have already been achieved.

A fantastic way to ruin

I can think of few better ways to reduce your wealth and increase the likelihood of self-imposed poverty. Yet this approach will happen this year and the next and probably for the rest of our lifetimes.

Your future is way too important to muck around trying to be an investment genius. The investment geniuses aren’t even able to consistently achieve outperformance. Many end up simply taking bigger bets and gambling with higher sums – just ask investors how happy they are with the genius of Mr Woodford about their holdings now.

It does not have to be like this!

It does not have to be like this. You can accept the reality that in life some things you simply cannot control. The markets and the returns from them cannot be controlled by you (or me). We simply must embrace reality, look to the real data and plan appropriately. We help you take the market return from the assets you invest in. Cost effectively. We take a long-term view. I mean decades long, because that is how long your money will remain invested, providing a lifetime of income to you and those you hold dear.

Don’t play the fools game. Get over the illusion of perfection and stop procrastinating. Now is the time, always. Get in touch to get yourself on track.

Call me on 020 8542 8084 or email me.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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THE PERFECT MARKET TIMING?2020-01-23T18:27:00+00:00

HOW TO STOP TIME

TODAY’S BLOG

HOW TO STOP TIME

I have recently enjoyed a rather good book “How To Stop Time” by Matt Haig. The basic outline is that some people age much more slowly than the rest of us. This provides for some fascinating encounters in history, walking the streets of London from the time of Shakespeare to the present.

Matt Haig has already assembled an impressive body of work and this novel, which was published a little over a year ago is a really worthwhile investment. It is the story of Tom Hazard who at 41 has a secret that must be maintained and kept from the witch hunters of the time. Tom ages slowly – about 15 times more slowly, so whilst Tom moves from 15 to 20 years of age, his contemporaries have become 90. This makes for good fiction and a hugely enjoyable walk through history from the late 1580’s.

How to Stop Time - Matt Haig

Short-term obsessions

There are some wonderful insights about time, fear of the future and relationships. It prompted me to reflect on the main problem that we all have – being somewhat obsessed by the short-term and immediacy of “news”.  There is a great line that I shall probably use – “your nose is pressed against the canvas, you need to stand back to see the whole picture”.

Predicting the future?

As a financial planner that uses cashflow modelling, there is a danger of giving the impression that the future is predictable. There’s something of the mystic meg with her crystal ball, seeing the future… The truth is rather different – it is only predictable in its unpredictability. However, we can look to history as a great teacher. We use historical data to help shape our assumptions about the future. We get to play with the future, to alter it and reinvent scenarios, time and time again.

A client recently confessed that “the penny had dropped” for him. He was suddenly gripped by the reality that his retirement is now not so much theoretical, but all too real and getting closer by the day. Time marches on and it eventually forces us all to pay close attention. We now adapt the possible scenarios with far greater awareness of time. His experience is very normal and in practice it really doesn’t make that much difference how many times I or anyone else says – start investing early, there are always other calls for your money and the future, is… well, it’s the future, not the present.

In many respects Haig concludes that to know thyself and live a life without fear of the future is the logical conclusion for all us “mayflies”. Relationships are temporary and to be treasured. Loss of loved ones is a far harder path than the loss even of identity, let alone wealth. My job is to help you preserve yours, to start with the end in mind and to underscore your values – the people, places, things that make your life’s work worthwhile.

Time marches on, thankfully.

I enjoyed the book, here is a link to help you find it. Matt has been wonderfully honest about his struggles with depression and its also worth having a listen to his videos on the topic – reasons to stay alive. Here isn’t a bad place to start…

Oh and if you are interested, Matt Haig is currently touring the country promoting “Notes on a Nervous Planet”. Brighton at the weekend then blazing a trail up to Edinburgh for 28th April.

Dominic Thomas
Solomons IFA

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

GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

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GET IN TOUCH

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

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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HOW TO STOP TIME2019-03-28T19:56:41+00:00

2015 has been a bad year…. for investors too

2015 has been a bad year… for investors too

It has not been a good year for investors, frankly it has not been a good year for lots of people – we are all aware of the disasters and atrocities that have occurred around the world. So as you review your investments which have not performed as anyone would have hoped, a sense of perspective is probably wise.

The problem with stock market or traditional investing is that we see good years a bad years. 2015 has been a bad year, with the FTSE100 opening the year at 6,556 rising to a high in April of 7,103 (up 8.3%) but currently lagging at around 6,050 (down 7.7% over the year to date).

It is natural to feel annoyed and fed up, particularly as it is easy to get the impression that somewhere, somehow others are doing better. The truth is perhaps rather different. A fall of 7.7% is what the market provided via the FTSE100 (the UKs 100 largest companies). To have a smaller fall (or even a gain) you would have had to take more investment risk (essentially attempting to beat the market return based on belief, information or frankly luck). The market return is literally the market average return. This assumes that you were invested at the start of the year. If you invested towards the end of April your “loss” would be worse.

Realisation about Loss

However what is a loss? In essence a loss is only realised when you sell your investment for less than the price you paid for it, which might happen due to changing circumstances, but should not happen within a financial plan.

Part of my role is to help clients minimise their mistakes. One would be to sell at the bottom – to panic and “get out” once markets have fallen (this would be called “realising a loss” – ie making it real). It is tempting to do so, but unwise unless your circumstances have genuinely changed.

Risk and Diversification

However all portfolios are diversified across a range of assets, so you aren’t purely in the FTSE100. Portfolios have a global nature and hold cash, commodities and Bonds. The mix (asset allocation) is the important tool we use to devise a suitable portfolio for you, given your ability to cope with investment risk and also have a context (your financial plan) for your money. This is what we call diversification of risk, but might be better understood as “not holding all your eggs in one basket”.

Yes, the year has been poor for investors, but do not be tempted to seek higher returns, and yes even cash with its dreadful returns was a better option in hindsight. The returns will “feel” and appear worse as statements at 5th April would have exposed the comparative high point in the year. However in the long-term investing rewards those that stick with the plan. There is ample and readily available evidence for this.

Noisy “genuises”

Be mindful that most people will never (or very rarely) talk about their investment losses, but invariably shout from the rooftops about their investment successes. The truth is rather different and much better hidden. This applies to private investors and professionals alike.

Tomorrow I will highlight another mistake that you can avoid and frankly, one that you need to encourage anyone you know to read the piece.

Dominic Thomas
Solomons IFA

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

2015 has been a bad year…. for investors too2017-01-06T14:39:21+00:00

Chasing Gold – That Night in Rio

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Chasing Gold

So Germany won the World Cup, deservedly so. A final game of 120 minutes chasing gold. However, as if to underline my previous post about the tournament, I came across a useful piece on the BBC website. This also suggests that it is not about one month in Brazil – that is merely the end of the competition. Of the German squad that picked up winners medals last night in Rio, six of them were members of the 2009 Under 21 European Championship – who beat England 4-0 in the final to win the tournament. They were Neuer, Ozil, Howedes, Boatend, Khedira and Hummels. By comparison only one Englishman from that same match made it to Rio – James Milner. Unfortunately Theo Walcott was injured, but the rest did not feature in the squad.ThatNightinRio

Success in football or indeed in any walk of life is not easy. Last night we saw one of the best players in the world walk away with a trophy that could have gone to a number of other players, who probably all had better tournaments. There is no doubt that Lionel Messi is one of the most talented players, but simply being so, does not guarantee success. Those that made the decision to give him the golden ball award, should have thought again, Messi from all accounts is a very decent man and looked uncomfortable collecting the award, and yes, whilst I don’t know that he was (who does?) one got the sense that it was more than simply being on the losing team, this smacked of marketing and nothing more.

The same is true with investing, you can simply look up the top performing funds, but this is historic data and any good portfolio is more than a collection of historically well performing funds. It’s about getting the right mix (asset allocation) and then the right level of risk (defence and growth) and then the best value for money that will do the job (so none of the “stars” that played for Brazil). Certainly there are moments when you are likely to need to hold you nerve, but that is all part of the long-term thinking rather than a constant chop/change trying to chase the gold.

Dominic Thomas: Solomons IFA

Chasing Gold – That Night in Rio2017-01-06T14:39:35+00:00

Wimbledon 2014

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Wimbledon 2014

For me, many of life’s milestone’s are based upon the sporting calendar. Its Wimbledon 2014 and its not so much that I watch every shot but that it signifies that the English summer is really here (despite the weather). It acts as a reminder of years gone by, stretching all the way back to childhood and watching coverage on the BBC or even listening to games on the radio. It isn’t even as though I’m particularly recalling all the great tennis players of the past, merely that it, like so many other events is another way of marking time and moments in my life. SOlomons-5-most-common-mistakes-cover

As we are based in Wimbledon, well… next door. It seemed like a good idea to create a small campaign. So I have put together a free report that you can download for free. This explores the 5 most common mistakes that investor make. I have probably got a lot to learn in terms of making the report punchy or marketing friendly. Its a genuine attempt to provide something of use to anyone that has any intention of investing.

Do have a look at the report, I’d welcome any feedback, more importantly though, pass on the link to your friends that you believe could benefit.  Here is the link

Solomons-IFA-Twitter-adS-1Dominic Thomas: Solomons IFA

Wimbledon 20142017-01-06T14:39:36+00:00
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