FINANCIAL INDUSTRY NEWS

Time to spread your wings a little?

Spring has arrived (meteorologically, at least), although when you consider the weather we had at the end of last month, it did make you wonder if Spring had moved aside and let Summer sneak in by the side door! 

I do find the sunshine always brings out the best in people. Certainly, it was a pleasure being out and about and seeing both young and old enjoying the fresh air. It does make you wonder if a better time to consider a New Year Resolution is not January when it is cold and dark, but the new Tax Year in April, when nature makes you feel more inclined to get up and about.

Therefore, with nature starting to stretch out a little, perhaps now is the time for you to consider spreading your own wings, as it were. We are always encouraging people to consider what they can be spending and doing with their money, rather than it just accumulating for the sake of it. Therefore, whilst this might be a good time to renew those New Year Resolutions that may have slipped somewhat since January, another option is to commit to learning something new as the summer approaches. 

There is no doubt that tackling something new or trying something different is good for the body and mind. We all recognise the benefit of regular exercise, even if it is simply a walk to the shops or pushing the lawnmower around the garden. However, it is also important to exercise the mind. Starting a new hobby, helping out at your favourite charity or even learning a new language are all excellent ways to stimulate your mind as well.

To help those who wish to learn a new ‘language’, we will be running some financial workshops in June (as within the financial world it can sometimes feel like we use a different language). Whilst we are always keen to discuss what you can be doing with your money, rather than just looking at how much you have, we also recognise that financial education can go a long way to helping you understand the options available to you as you progress in life. 

Should you be somebody who wishes to learn a little more about some of the intricacies concerning your financial circumstances, these workshops may be of interest to you. Full details will follow in due course and please look out for the invitations that will be emailed to you in April.

In the meantime, you could take the opportunity to consider what you would really like to do as the summer approaches. There is a Chinese proverb which states ‘the best time to plant a tree is 20 years ago, the second best time is today’. Therefore, if you didn’t start your new hobby twenty years ago, why not start it today!? Spending some of your money on a little bit of ‘me time’ may be just the tonic as Spring approaches.

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Timing the Market or Time in the Market

Until such time that somebody creates an investment product that offers all the performance of the Stock Market with the stability of a Building Society account, we are going to have to accept that volatility is part of long term investing. This is especially problematic when the markets fluctuate as much as they have done in recent months, but it is just as important to remember why you are investing, as well as considering what you are invested in.

We remain confident that discretionary investment management can provide the returns you need, but with a level of risk and volatility that helps you feel confident to stay invested over the long term. We believe this approach gives the best opportunity of meeting your goals. However, it is important to highlight two key factors when investing:

  1. Having a well-diversified portfolio of investments is crucial. Different assets or regions will perform differently and can often vary significantly year on year. The diversification that comes with this varied performance can help reduce the risk of having all your assets in one asset class or region. This is also then linked with the risk you are prepared to take and your own personal capacity for loss.
  2. Successful investors are marathon runners, so to speak, rather than sprinters! When you see the markets fluctuate, it can be tempting to buy and sell investments to chase short-term gains. But this will rarely help you meet your longer-term financial goals. In our experience, spending the time up front to create a good long term strategy, then having the discipline to stay in the market when necessary, even if it feels uncomfortable, will create the best chance of success.

This second point can be backed up with a simple example. Statistics have shown that if you held UK shares for one year only, you would have lost money in more than 20% of instances. However, if you held your UK shares for ten years, you would have lost money in fewer than 2% of instances. It is a similar story with international shares over the same ten year period when you would have lost money in less than 4% of instances. Putting time on your side really does work!

We will continue to discuss your investment objectives at review meetings. Please note that we will need your assistance, if possible, with completing an up to date risk assessment prior to our meetings so we can discuss any changes that may need to be made to your portfolio. It is important to remember that volatility is simply part of a long term investment strategy, with market movements often providing an investment manager with some opportunity to buy.

We meet with our discretionary investment managers on a regular basis and closely scrutinise their performance. County’s message to our clients is that, instead of dwelling on potential concerns about the value of your investments, we want you to focus on what you could be doing with your money, as this will ultimately provide you with the most value from your investments over the long term.

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County Financial Limited is authorised and regulated by the Financial Conduct Authority. Financial Services Register No: 145831 www.fca.org.uk/register.

County Financial Limited Registered Address: 3 Gregories Court, Gregories Road, Beaconsfield, HP9 1HQ. Registered in England & Wales, No. 3467400.

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