There is a lot of speculation at the moment about the next rate rise in the US being imminent, and fears about the Brexit vote are reaching fever pitch. Are these factors something which should concern you?
Investing for Growth
The “Stein PCP Mantra” is that when investing with the objective of increasing the real value of your capital it should be supported by a co-ordinated long-term Financial Plan that provides a track to run on and is focused towards achieving your agreed goals & objectives.
The very minimum target should be to exceed bank interest rates and actual inflation over the savings period or you are losing “real value”. However, you should always maintain adequate liquid funds to deal with any short-term emergencies that arise and commit all of your surplus income and capital to your Financial Plan, reviewing progress at least annually.
When Relying on Income from your Investments
If you rely on drawing regular income from your investments you should retain a minimum of 2 years income requirements in a short-term easy access bank facility so in the event of a downturn in asset values you can suspend income payments and wait for values to rebound. When they do you top-up your now depleted cash position and start drawing income again.
All of the above should be supported by a co-ordinated Financial Plan, again reviewing progress at least annually.
Committing to a Financial Plan
Irrespective of Brexit, or any other matters that may have a short-term effect on values, if you adhere to the above principles and allow us to help you become what we call at Stein PCP, “Financially Well Organised” supported by a well co-ordinated Financial Plan, you will be protected against most events.
All Financial Plan’s if implemented successfully will achieve your goals and objectives
There is likely to be short term reactions leading up to and after to the UK in/out results are known, which could be positive, neutral or negative, no one knows exactly what will happen and how long and far reaching the reaction will be.
However in the short-term the effect on Sterling could be dramatic, with forecasters indicating that a vote to leave could see Sterling drop by between 10% and 20%, whilst a vote to remain could see Sterling rise by up to 6%.
Be aware that markets do not like uncertainty. Changes in macro-economic events often causes short-term fears resulting in knee jerk reactions only for when the dust settles, it is business as usual, until the next event comes along and history repeats itself.
Investing is a long-term commitment and when supported by a realistic, well advised, regularly reviewed Financial Plan that allows you the comfort to not stress over short-term fluctuations in asset values and stay committed to the commitment of your Personal Financial Plan you will inevitably achieve your goals & objectives over the longer-term.
Should you have concerns about the balance of your portfolio(s) or are underweight in cash leading up to this period of uncertainty please let us know. If required, we can help you change currencies at preferential exchange rates and to rebalance your current cash reserve position.
I will look forward to hearing from you.
All good wishes
Principal – Stein Personal & Corporate Planners
“Asset values fluctuate and any short-term setbacks usually recover given time, providing that you have been well advised. However time lost to Financial Planning is expensive as it is lost forever because we just cannot turn back time.”
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
- How to Become a Successful Investor
- Brexit Investment Strategy
- Be Smart, Be Prepared, Be Legal
- Brexit – What Now?
- What is Financial Planning?
Share this story