Lost Gardens of Heligan

Debbie Harris 
August 2023  •  5 min read

Lost Gardens of Heligan

I spent last week in a beautiful part of the world called Gorran Haven, Cornwall.

I have been going there each year with my wider family for over 20 years – it’s our home from home (17 of us attended this year!).

Many years ago, we visited The Lost Gardens of Heligan which is (as their website says) an “astonishing story of regeneration”.

In the 1990s these Victorian productive and ornamental gardens were rediscovered in the grounds of an old mansion house under mountains of brambles and ivy and since then have been lovingly restored to something close to their former glory across 200 acres (so far).

On the estate, there are ‘living sculptures’, magnificent woodland walks, bee hives, farm animals, a ‘jungle’, giant rhubarb plants, enormous rhododendrons, productive gardens (herbs, vegetables, fruit), pleasure grounds, natural climbing trails for kids and adults alike and many ‘work’ areas that were used in Victorian times and have been left much as they were – all providing something of a glimpse back in time.

We went again this year and I was most inspired by the growth that had taken place since my last visit – the workforce there have managed to achieve an evolution of sorts without appearing to have interfered too much with nature’s processes.  It was as wonderful as I remembered; in fact it was better – largely not too much had been tampered with; but certain things had been tweaked, enhanced, emphasised and it was breathtaking.

On reflection, it reminded me (a little!) of why we tell our clients to trust the investment process – it’s a long-term endeavour; it only needs minor tweaks along the way; and can be managed effectively with mindful and careful ‘interference’.  Importantly it takes time and patience (and an expert hand).  Your financial plan may not look like a fine ornamental garden; it may not be an inspirational thing of beauty; but it is ultimately your creation and speaks of your life, your wishes, your legacy and ought therefore to be treated with respect and care by people who think it matters – you and us.

Lost Gardens of Heligan2023-12-01T12:12:29+00:00

Flat pack fever

Daniel Liddicott
March 2023  •  4 min read

Flat pack fever

Flat pack furniture – a phrase that strikes fear into the hearts of most people, and often for very good reason – the poorly labelled pieces; the multitude of supposedly vital fixtures and fittings; the cryptic instructions seemingly written with the sole purpose to confuse and annoy.

I am delighted to say that my wife and I are expecting our first child at the end of March! This is, and has been, an extremely exciting and often anxiety-inducing time. I am sure that I am describing a period of time that is familiar to many of you. In amongst all of the preparations, baby book reading and antenatal classes, there is the inevitable task of assembling our unborn bundle of joy’s nursery furniture. Unless, of course, you wisely paid for the outsourcing of said assembly process – alas, we did not.

So began an entire Sunday of unpacking boxes, organising various pieces, deciphering assembly instructions and good old elbow grease – not to mention dusting off our toolbox that is used so sparingly.  It took a great deal of patience, persistence and a coffee or three – but my wife and I ended the day proud that we had persevered, feeling that little bit more prepared for our baby’s arrival.

Financial planning requires persistence and perseverance.  It requires all of those vital ‘fixtures and fittings’ – your savings, investments and pensions. Whilst sticking to the plan can feel painful at times, particularly through the current cost-of-living crisis and the adverse market conditions that we have seen over the past 12 months; enduring through the difficult moments will help you to achieve what you set out to do at the beginning.

I would be lying if I told you that the mental and physical strain of piecing together those jigsaw puzzle-esque pieces of furniture didn’t give me pause, but the sense of achievement from staying the course and completing the task at hand gave me a great sense of achievement at the end of the day. The increased preparedness that I felt for our baby’s arrival after having set up the nursery was profound – and a welcome, cathartic surprise.

If you feel the need to reach out during these testing times, please don’t hesitate to get in contact with us. We are here for you when you need us, to guide you and be the reassuring voice that encourages you to stick to your well-made plans.

And speaking of testing times, I am due to be extremely busy in both my personal and professional life in the very near future – tax year end baby on the way!

Flat pack fever2023-12-01T12:12:35+00:00

What drives investments returns?

What drives investment returns?

Here is a piece from another good communicator at Dimensional – one I have met (and he’s as thoroughly entertaining as he is decent). Weston Wellington (what a great name!) penned this piece for Dimensional and I have permission to share it with you, I think it provides some useful insights. I hope you agree. As ever, there are American references, but if we are looking after your portfolio, you will recall that we invest globally and that the US market makes up about half of the world stock market by valuations. Over to Weston…

A recent news item reported that Frederick Smith intended to step down as Chairman and Chief Executive Officer of FedEx Corp., the largest air freight firm in the world.

FedEx for a Mr Smith…

As a Yale undergraduate in 1965, Smith wrote a term paper for his economics course outlining an overnight air delivery service for urgently needed items such as medicines or computer parts. His professor was not much impressed with the paper, but after a stint in the Air Force, Smith sought to put his classroom idea into practice. He founded Federal Express (now FedEx) in 1971, and one evening in April 1973, 14 Dassault Falcon jets took off from Memphis airport with 186 packages destined for 25 cities.

In retrospect, it was not an auspicious time to launch a new venture requiring expensive aircraft consuming large quantities of jet fuel. Oil prices rose sharply later that year following the Arab states’ oil embargo, and the US economy fell into a deep recession. Most airlines struggled during the 1970s, and Federal Express was no exception.

But Smith’s idea found favour with customers, and 49 years after its initial deliveries, the firm is a global colossus with over 650 aircraft, including 42 Boeing 777s—each of which can fly more cargo than 100 Falcons. Although it took over two years to turn its first profit, FedEx became the first start-up in American history to generate over $1 billion in revenue in less than 10 years without relying on mergers or acquisitions. The journey has proved rewarding for investors as well—100 shares purchased at the initial offering price of $24 in 1978 has mushroomed to 3,200 shares worth over $718,000 as of May 31, 2022.*

Fred Smith’s idea is just one example of ingenuity that humans have exhibited for centuries. Sticks and stones led to hammers and spears, the wheel and axle, the steam engine, and eventually semiconductors and jet aircraft. The invention of writing made it possible to store and hand down information from one generation to the next, enabling ingenuity to compound into an ever-increasing body of knowledge. Although we often associate innovation with clever new technology, some remarkable developments have required little more than astute powers of observation. The curse of smallpox, for example, has afflicted humans with death or disfigurement for thousands of years. English doctor Edward Jenner noticed that milkmaids who had previously experienced cowpox did not catch smallpox, and in 1796, he took material from a milkmaid’s cowpox sore and inoculated James Phipps, the nine-year-old son of his gardener. Later exposed to the virus, Phipps never developed smallpox, and Jenner published a treatise on vaccination in 1801. Smallpox vaccines gradually eliminated the disease in countries around the world, and the last known case was reported in Somalia in 1977.

Where do returns come from?

ONE INNOVATION PAVES THE WAY FOR OTHERS

  • Charles Lindbergh took off from Long Island for his historic transatlantic flight to Paris on May 20, 1927. That same day, J. Willard Marriott opened a nine-stool lunch counter serving cold A&W root beer in Washington, D.C. Ten years later he began to supply box lunches to airlines flying from nearby Hoover airport and 20 years later opened the world’s first motor hotel in Arlington, Virginia. Today, Marriott is the world’s leading travel firm, with over 8,000 hotel properties in 139 countries.
  • The now-ubiquitous microwave oven can trace its roots to a happy accident. While working on radar equipment in 1945 for Massachusetts-based Raytheon, electronics engineer Percy Spencer noticed that the chocolate bar in his pocket had suddenly melted. His curiosity led to the introduction of commercial-grade water-cooled microwave ovens in 1947 costing thousands and ultimately to countertop units available today for $99.
  • Frustrated by lengthy delays associated with loading and unloading cargo ships, trucking firm owner Malcolm McLean launched a shipping service in 1956 using standardized steel containers of his own design. Met with great scepticism when first introduced, his idea for theftproof stackable cargo boxes eventually transformed the global shipping industry—and world trade—by slashing dockside loading costs over 90%.
  • On June 26, 1974, cashier Sharon Buchanan inaugurated the era of barcode inventory tracking when she scanned a pack of Juicy Fruit gum bearing a Universal Product Code at Marsh Supermarket in Troy, Ohio. Barcode scanners eliminated the drudgery and inevitable mistakes associated with manual entry by checkout clerks and provided store managers with powerful tools to track sales trends. As retailers such as Home Depot, Ross Stores, and Walmart expanded throughout the country in recent decades, barcode technology played a key role in matching inventory with local preferences at each location.
  • In March 2022, a 20-year-old woman born with a small and misshapen right ear received a 3D-printed ear implant made from her own cells and shaped to precisely match her other ear. Although experimental, the procedure represented a significant advance in tissue engineering and could eventually lead to artificial organs such as lungs or kidneys.

THE BENEFITS OF INNOVATION ARE WIDELY DISPERSED

The benefits of innovation are widely dispersed throughout the economy, often in unpredictable ways. Apple Inc. became one of the world’s most valuable companies based on its clever marriage of the computer and the telephone; both iPhone users and Apple shareholders reaped substantial rewards.

On the other hand, suppose your fairy godmother had told you in 1935, at the dawn of commercial air travel, that this tiny sector of the economy would eventually become a gigantic industry with millions of passengers flying every year—including some flying from breakfast in New York to Los Angeles for dinner. What would your prediction be for industry pioneers such as TWA or Pan American? Most likely, bountiful prosperity and rewarding stock market performance. The millions of passengers materialized. The profits did not. Both firms went bankrupt. So innovation itself does not ensure prosperity in every case.

That’s why it makes sense to diversify. Investors are often tempted to focus their attention on firms that appear poised to benefit from innovation. But it’s difficult to predict which ideas will prove successful, and even if we could, it’s unclear which firms will benefit and to what extent. Software giant Microsoft has been a big winner for investors, with the share value soaring more than 100-fold over the 30-year period ending May 31, 2022. Discount retailer Ross Stores proved even more rewarding, as the stock price multiplied over 189 times during the same period. One firm developed powerful computer technology and the other applied it.

Civilization is a history of innovation—curious minds seeking to improve upon existing ways of meeting mankind’s wants and needs. Public securities markets are just one example of such creativity, and they have a history of rewarding investors for the capital they supply to fund such innovation. But a significant fraction of the wealth created in public equity markets typically comes from only a small number of firms; therefore, we believe owning a broad universe of stocks is the most effective way to participate in the rewards of ingenuity and innovation, wherever and whenever it takes place.

Footnotes

*Stock split information sourced from FedEx investor relations website. Stock price information provided by Bloomberg. This is not taking into account cash dividends or any reinvestment.

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

What drives investments returns?2023-12-01T12:12:44+00:00

NFT – NEW FAIRYTALE

TODAY’S BLOG

NFT – NEW FAIRYTALE

Perhaps you haven’t heard about NFTs, if not give yourself a pat on the back. However, it’s possible that you have seen something online or had a younger person mention it to you and perhaps it left you a little perplexed. I am not a fan. To me this is yet another of “The Emperors’ New Clothes”. I am concerned that a lot of people will say goodbye to their hard earned savings for fear of missing out and not understanding investing, in a culture that appears to tell us not to invest in the stock markets. Give me a moment and I will try to explain why.

One of the main reasons for people being scammed is due to a fear and lack of understanding about the stock markets. The market volatility is regularly reported by what passes as news, keeping you informed about the latest FTSE100 movement. “Billions were wiped off the markets today” is a phrase that regularly rolls off news presenters’ tongues, yet rare is the day (have I ever?) when we hear the “billions wiped on”. We are all kept in a state of anxiety about impending doom and it is quite deliberate. It gets your attention.

SO WHAT… HOW DOES THIS ENCOURAGE SCAMS?

Well, fearing the investment of your money in the most regulated, scrutinised exchange, where data is published and reviewed every day of the year and has been for decades, it seems that the volatility and the anecdotal “I lost money” or “my dad lost money” triggers the big red panic button that most of us have. So many turn to alternative forms of investing in the mistaken belief that they are less ‘risky’ (in fact some seem to be a ‘sure thing’). Oh, and for good measure, we humans are impatient, we love a happy ending and have a tendency to ignore the hard work that went into creating one (if it even is an ending). Or to put it another way, to approve of and want successful investments once they have happened.

NFTs The New Clothes

INVESTING IN REAL COMPANIES

When you invest money into the stock market or funds of equities (as is more likely) you buy shares in companies that trade internationally. They do so by making or providing goods and services that we want, need or require. As markets are generally competitive, they strive to improve what they do to ensure their own sustainability. Where companies often go wrong is cutting corners to reduce costs and increase profit rather than improving what they do and communicating this properly. On occasion, you may have an objection to the company, or its sector or the people that lead it. So you can (we can) screen out some of these based on ethical, environmental, social or governance standards. At the same time, you know that ‘cheap’ is unlikely to be high quality, but you also know that we don’t all need our weekly shopping from Harrods. There is a range; a spectrum. Sometimes we pay more for things because of the feelings that it evokes, sometimes we do so because we instinctively know it to be better.

Your investment appreciates in time as the company you invest in grows. You also receive a share of the profits made (dividends). Quite how much and how well these companies ‘perform’ is largely down to how well they run and… luck. By luck I mean – the right place at the right time, for example being a PPE manufacturer and a pandemic arrives.

You get your money back when you sell your investment. In the interim, you’ve hopefully had some dividends and an improvement in the value of the share. If you hold a handful of companies and one or two fail (such as the Kodaks of the world) then you have a proper loss. If you hold thousands, perhaps an entire market, then the impact of any failure is significantly reduced.

INVESTING IS NOT GAMBLING

Placing a sporting bet or a stake in a casino, you are hoping for a win, or something close to that to get your money back, plus the incentive to make the bet in the first instance. You may get back nothing – which is far more likely. That’s gambling – the risk of complete loss. For some people this is a small bit of fun (I can think of many better things, but I won’t judge), for others it becomes an addictive habit that can destroy families.

When you consider investment in proper companies (shares in them) over time, going back to the start of your lifetime, there is only one direction of travel for the combined value of your investments. Upwards. Yes there are bumps along the way (volatility) but you own real assets (companies) making and providing real products and services.

THE NEW CLOTHES

The digital world and our obsession with it, has given some people the idea that a digital image is worth something. These NFTs (Non-Fungible Tokens) are in my opinion the equivalent of the Emperor’s new clothes. The value is talked up by nefarious online forums and chatrooms and ‘traded’.  I would not touch them with the proverbial barge pole. If in the event I am wrong about this in say three decades time, that’s fine with me as I will be holding assets that provide regular income from actual profits from making real products and services. I can and will happily live with that and until proven otherwise, I will not aid anyone into deliberate folly.

HMRC’s NFT SEIZURE IS A WARNING TO ‘INVESTORS’ AND TAX CHEATS

The UK tax authorities have confirmed their first ever seizure of a non-fungible token (NFT) following a probe into an alleged £1.4million VAT fraud. Her Majesty’s Revenue & Customs (HMRC) said it had confiscated three NFTs, along with £5,000 in other crypto-assets, and arrested three people as part of a fraud investigation concerning around 250 sham companies. It claims the three suspects, who have not been publicly named, used a variety of ‘sophisticated methods’ to try and conceal their identities, such as false invoices, pre-paid unregistered mobile phones and virtual private networks.

NFTs are tokens representing the ownership of a digital asset, which could be an artwork, an image, music, or even a tweet that have their own unique signature and cannot be exchanged for another asset of the same type. But there has been increasing worries that these digital tokens, as well as cryptocurrencies, are being used by criminals to hide their illicit financial gains. Nick Sharp, the Deputy Director of Economic Crime at the HMRC, said: “Our first seizure of a Non-Fungible Token serves as a warning to anyone who thinks they can use crypto-assets to hide money from HMRC.”

Understand the real risk and buy real assets. You have been warned.

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

NFT – NEW FAIRYTALE2023-12-01T12:12:53+00:00

MORE MARKET VOLATILITY – UKRAINE CRISIS

TODAY’S BLOG

MORE MARKET VOLATILITY – UKRAINE

The depressing news that Russia has invaded Ukraine will please nobody. The tension has been building and reflecting in global prices of all assets. The value of something is always spurious. The stock market is about as regulated and wrapped in red tape as it is possible to be, constantly monitored around the world, it is arguably the purist, cleanest way to value companies and trade currency, bonds and commodities.

As a client, you have ample experience to know that markets rise and fall. The forward rise of markets is a permanent state (when considered properly) the declines are temporary. This is how things are, this is the uncomfortable truth. That means there are occasionally very large temporary falls in value… which then recover.

A loss is only created when you sell for less than you paid. If you sell holdings in a market low, you are likely to have lost money on your investment. If you wait – until you need the money, as we have carefully planned with you, then you will ride out the storm of the day.

Something familiar

UNKNOWN FUTURE

I do not know how the situation in Ukraine will unfold. Nobody does. I think it likely that we can all agree that world leaders don’t really seem to be very good these days, inflated egos and social media soundbites are no basis for running a country well. There are an array of reasons and motives behind the Russian aggression, maybe this has been many years in the making. A weakened EU, a divided UK (most nations now seem to be), the stalwart of Germany out of the way,  a pandemic that has cost billions and an energy ‘crisis’. Opportune or designed? Or perhaps this is ‘nothing more’ than a long-held grudge about the expansion of NATO. Or perhaps this is purely about the energy supply lines that go from Russia through Belarus and Ukraine and it makes up the majority of their income from abroad (worth a glance at a piece from five years ago here). Here is an image from the Economist to provide a little illumination.

The Economist / JP Morgan

We do know that Mr Putin is certainly someone that is capable of playing the long game, unlike our own Prime Minister. Has he underestimated his opponents and the degree of international outrage? Perhaps. He probably took reassurance from Syria, Afghanistan or Yemen where the world basically made an noise and then left quickly. I have no idea, neither do you unless you are at GCHQ or MI5 or some similar organisation – and I suspect even then you are guessing.

What I can tell you is that markets will recover. Politicians do not get to shape your financial plan. It is built with market volatility in mind. Whilst we are again confounded by the folly of war by the few on the many, we can hope that this ends soon with minimal loss of life. Yet we are realists and know that egos need to be nursed into a state of calmness before aggression ends. There is much work to do, but worrying about your portfolio is not on the list. If anything, the temporary decline in value is another opportunity to buy at a discount.

We are all concerned about the lives of people in Ukraine and the surrounding region, that is an entirely proper response. But this time it’s different… well, the events maybe (though they echo history) but actually these dreadful events are sadly all too normal and familiar.

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

MORE MARKET VOLATILITY – UKRAINE CRISIS2023-12-01T12:12:54+00:00

IN SEARCH OF ANSWERS

TODAY’S BLOG

IN SEARCH OF ANSWERS

I had the unwelcome task of writing to clients to advise that the value portfolios have fallen by over 10% since the start of 2020. The emails that I sent seemed to be well received. Today has been another very tough day for investors (and their advisers). The charts are rather frightening, this comes at a time when we are all (most of us anyway) rather anxious about the state of the world and a deep sense of unease.

So, without wishing to fudge any issues, I thought it best that I re-use the bulk of the content that I have been sending.

It is now a regulatory requirement to tell you when a portfolio falls by 10%. This is a new experience for me, despite being an adviser for several decades. I genuinely believe that this new requirement comes from well-meaning regulation, but is entirely counter-productive, because it is essentially alarmist. I will endeavour to add a little more flesh to the bones.

Focus on what is important

SHOULD YOU WORRY?

Should you worry?  No; but anxiety and concern are normal responses to ‘seeing’ the value of your portfolio fall.  Anxiety or fear are normal responses to ‘danger’ or bad news.  We are built that way and it is why we have survived as a species for as long as we have. However, the instinct of ‘flight’ is of no use to investors.  The stock markets of the world fall in value each year.  I would refer you to the various articles I have written about this over the years and remind you that 1 in 4 calendar years have negative returns.  This is part of ‘the norm’ and indeed we don’t get the positive returns without the negative. However yesterday’s headlines of the FTSE’s second largest fall in a single day does not really help calm nerves.

UNCERTAINTY IS NORMAL

The problem with investing is that markets are not predictable, despite appearing so.  What is predictable is irrational investor behaviour. This is precisely why we ask you to complete an attitude to risk questionnaire.  So that a suitable portfolio is constructed for you – one that provides the chance of delivering the returns you need whilst enabling you to sleep at night.  You will have experienced similar falls in value before, but either didn’t notice, or were reassured.

WHAT IS A LOSS?

When the value of anything falls, it only impacts those selling.  A crash in property prices, impacts those selling their home, most of us do not notice, although it may provide conversation around the dining table with friends or colleagues.  Unlike property, the value of equities and bonds are transparently priced throughout the day in a highly regulated market.  When you sell your home, frankly the price is a bit of a guess by the estate agent, surveyor and then haggled over by seller and buyer … in practice, a very small and biased market.

The key is not to panic; not to sell.  You know this, but we also know it is hard to do.  You know that you should sell at the top and buy at the bottom, however as humans we tend to do the exact opposite.  I’m not going to pretend that this doesn’t make us all wince and wonder, but equally I will remind you to stick to your plan – yours; not those of a media which seems only intent on making you miserable.

Your portfolio is globally diversified, it is well balanced, it is low cost and it is properly reviewed.  We have biases towards smaller and value equities which over time will demonstrate to be better value.  There is a  huge amount of research that should you wish it, I can point you to.  However, I tend to think of that as my job … to help you make better decisions with money and help reduce or avoid all the daft ones.

THE UNCOMFORTABLE TRUTH

If you are investing on a monthly basis, the fall in prices is a bit of a bonanza – because you buy more for the same money.  We expect values to rise.  They will; it’s just a question of when.  For those who add lump sums, similarly now is essentially a discount sale that will not last.

Those who are withdrawing money have a much tougher time.  The fall in prices means you sell more holdings to get the same figure out. Thereby not benefitting as much when prices rebound.  They will, and you will, but not as much.  In an ideal world, you will have discussed and outlined your plans for income or lump sum withdrawals and we have already factored this in.  If you need to review this, then please get in touch.

DO NOT OBSESS OVER THIS

Looking at your portfolio each day will never help anyone.  It will rarely provide comfort.  Worry will not help you to live your life well.  You have to trust that the fundamentals of investing will remain true today, next week and next year as they have done over the decades.  Yes – there are ‘bad times’, but remember that market returns are positive 3 in 4 years on average, we simply don’t know the order or reason.

You are investing for decades and I have no doubt that this too will pass.

YOUR COMPLETE FINANCIAL LIFE

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

IN SEARCH OF ANSWERS2023-12-01T12:13:22+00:00

YOUR PORTFOLIO

TODAY’S BLOG

YOUR PORTFOLIO

I suspect that you have heard the expression “look after the pennies and the pounds look after themselves”. Well, a small win this week in that your investment costs will have reduced for clients using our portfolios. One of the fund management groups that we use (Vanguard) decided to reduce their annual management charges. Its not a massive reduction when taken in the context of a larger portfolio of funds, but every little helps. The reduced charges have been applied already.

We have also been reviewing our ESG portfolios. I was challenged the other day by suggesting that clients be opted into ESG portfolios with the option of opting out rather than being asked if they would like to opt in. I can see some merit in this, but it seems somewhat problematic when you consider that ESG portfolios are generally a little more expensive.

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

YOUR PORTFOLIO2023-12-01T12:17:09+00:00

America, you are better than this!

America, you are better than this

There are times, when I watch or read the news and am flummoxed by what I learn, particularly when it involves America. I don’t know why particularly, but I’m often left thinking – America, you are better than this!

Perhaps its due to personal contact with Americans, which to date has always been a good experience. Trips there over the years have been wonderful experiences and of course I’m a consumer so have enjoyed many aspects of this… let alone the many wonderful artists, film makers, sport stars and musicians.

We all know that we have a special relationship with North Americans, largely because we speak the same language and tend to fight the same fights. We share common values. Of course American foreign policy and politics is something rather different (and I won’t get into it now).

Liberty and Freedom

Whilst we are all aware that nations are scratching around for money and tax evaders are public enemy number one. It does seem somewhat at odds with any sense of American values. I’m talking about FATCA (Foreign Account Tax Compliance Act). This is based upon old tax rules about ensuring income is properly reported to the IRS (American form of HMRC).

Sledgehammer and Walmart… or rather Walnut

Due to the more sanguine approach to tax evasion (surely a good thing) there has been a series of “unintended consequences”. In essence, as the IRS demand income is accounted for, they require all foreign entities to report holdings of US citizens. As the significance of this has gradually dawned on the world, most financial institutions are avoiding the problem by ceasing to provide financial products and services to Americans. This is because, the US seems to wish to take the stance of applying onerous fines, in advance to the financial institutions.

As the rules about how income within investments or indeed from any assets is taxed operates differently from one country to another, but the US does not apply the local rules, deciding to apply their own. This makes a mockery of most of our normal arrangements such as pensions, property, ISAs, Trusts and so on which are essentially just treated as “savings”. There are complexities as you may imagine, but I won’t bore you with them here.

In essence, every US citizen, wherever they live has to submit a tax return. This has come to be understood that almost without exception, no financial institution wants to deal with American citizens for fear of being fined first and having to spend huge amounts of time justifying the whys and wherefores of common sense.

As a result Americans living outside of the US are finding it increasingly difficult to get basic things like a bank account, let alone anything as sophisticated as a UK pension!

Handing in US Passports

This has resulted in the bizarre situation of many Americans being essentially forced to renounce their US citizenship. Something that is frankly “nuts” in a costly process that seems akin to a public shaming with a Headmaster. There are about 9 million Americans living outside of the US. If you were born in the US, you have American citizenship – like the current Mayor of London, Boris Johnson, who was born in New York, you will be faced with the requirement to comply or say goodbye. He ended up having to pay the IRS various taxes on his UK assets, then declared he would be giving up his US citizenship.

There is a good piece on the BBC site about how American’s are finding this “hard going” with a bit more context. However, it is creating serious problems for UK financial institutions and advisers who are finding solutions very difficult to achieve for anyone with less than £500,000 of investments… and as you may imagine, the price for something of this importance (and risk to the organisation) isn’t as competitive as it might otherwise be.

America, you are better than this!…. at least that’s what I hope.

As for a film connection, if you are an American citizen living in Britain, you may feel as though you are being unfairly targetted…  as though you are an enemy of the State. So here’s the trailer to this Will Smith and Gene Hackman movie.

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

America, you are better than this!2023-12-01T12:19:26+00:00

Gold and the ATM give away

Gold and the ATM give away

The continued fall in the price of gold reminded me of a blog post that I wrote almost precisely 4 years ago (Gold to Go). This was a short piece about the arrival of an ATM that dispenses gold bars, rather small ones! in exchange for cash..

At the moment gold is at its lowest price in 5 years. The World Gold Council who recently issued their Q2 report, acknowledges the continued decline in the price of gold this year, but point to their belief that this is in part due to a possible increase in interest rates in the US.

Gold is really part of a defensive portfolio, not being cash, bonds or equities and an asset class that investors return to in times of uncertainty – or at least that tends to be the view based upon historical data.

I tend to take the view, from experience, that when investment advice is dispensed freely by those who clearly don’t have the qualifications to provide it, then there are serious signs of a bubble. An ATM dispensing gold at a shopping centre, placed their in July 2011… well the price of gold peaked in August 2011 $1,821 per oz. At the moment its around $1,093 per oz.

The price of gold soared from $431.65 per oz in July 2005, had a wobble from March 2008 until  September 2009 as it eventually broke through $1,000 per oz, climbing further until August 2011. The price has been in decline ever since and returning to the $1,000 per oz level, (no this is not a forecast) in part reflecting a higher degree of confidence in world economies.

Boutique Design

I’m not sure if the ATM is still at Westfield, but a quick online search suggests that there are a few in London, largely in International foreign Banks. Being a German machine (the Gold to Go one) it is incredibly reliable and prices are updated every 10 minutes, so the vending machine may easily provide you with a different price for your gold bar in-between coffee breaks.

Anyway, just so that you know, gold is fine as an element of a portfolio, but it really should not be too significant an element. Having all your investment in one asset class is very unwise – precisely why gold is one option of many. Here is the video of the Gold to Go ATM… please do not take this as advice to use the machine or indeed to buy gold, I am merely commenting on general principles and all investments ought to be made in consideration of your own context, plans, attitude to risk and capacity for loss.

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

Gold and the ATM give away2023-12-01T12:20:09+00:00

How is your fake detector?

Solomons-financial-advisor-wimbledon-bloggerHow is your fake detector?

Sadly there are many investment “opportunities” that are most definitely not in your best interests. Unfortunately these are not always easy to spot and it is important to have a good “fake detector” which is a polite way of putting things. Often, though not exclusively there will be a variety of investments that dress themselves up as one thing, when they are quite another. I don’t know the detail of the Icebreaker tax scandal involving members of Take That, but I suspect that they didn’t know what they were getting into… but someone did.

Too good to be true?

Invariably the sort of financial products that are prone to the excesses of the worst sort of marketing, are those that are fairly “exotic”. These often include Enterprise Investment Schemes, Venture Capital Trusts, Film Partnerships and Unregulated Collective Investment Schemes. That is not to suggest for a moment that all of these products are “duff” but clearly they need to be researched very carefully indeed.

Lessons from Bakersfield MistBakersfield Mist

Malcolm Gladwell in his book “Blink” which has received widespread coverage suggests that experts instinctively know when something is off. So it was with interest that I was at the very cosy Duchess Theatre last night to see Kathleen Turner and Ian McDiarmid in Bakersfield Mist, which is currently still in previews. This is a Stephen Sachs story about authenticity and centres around determining whether a painting is a real Jackson Pollock or a fake, a mere $100m at stake. It is marvellously performed by two great actors and directed by Polly Teale. The set design by Tom Piper itself breathes authenticity. Many will have seen both actors in various films, I was lucky enough to see Ian McDiarmid many years ago in Bath, at my first Shakespeare live performance. Kathleen Turner returns to London following her highly acclaimed performance in “Who’s Afraid of Virginia Woolf?” You will be hard pressed to find two more authentic performances which are scheduled to run until 30th August and I would rate this highly.

As in the play, one of the questions posed is being clear about motives. When assessing investments, the main motivation for an investor is whether or not the investment being proposed is likely to assist you in achieving your goals. The investment itself may have different objectives, perhaps creating a gain for the investment management team and not the investor, this is where impartial advice is crucial, but of course you need to ensure that your adviser’s motives are aligned with yours, by having one that you trust, not to mention the relevant expertise. So how is your fake detector?

Dominic Thomas: Solomons IFA

How is your fake detector?2023-12-01T12:39:12+00:00
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