Growing Investments

courgette2

One of our clients was kind enough to bring some fresh produce in the other day from his allotment.

After a few ribald jokes around the size of his courgettes, we took a couple of photos and it struck us that cultivating an allotment can have several similarities to managing an investment portfolio.

When starting with an investment plan or an allotment you only have a finite amount of space or funds to start with. So it’s not good practice to commit all your space or funds to one single produce.

A single investment or crop may give good returns for one year but over time it will stumble as most things are cyclical and benefit from rotation and diversity.

Once you have set up and planted your allotment you need to maintain it so that it continues to flourish, ensuring that any tweaks are made as the seasons evolve.

Equally, an investment portfolio is no different as you look to rebalance or move from one asset class to another.

Overall, there is one truism that can be applied to both activities and that is that growth comes from time, care and attention.

Platinum are always happy to review clients plans so if you, or anyone you know, would like to chat things through then please get in touch.

Market Update – Does It All Seem Greek To You?

grexit

The news throughout June seemed to stumble from one bad story to another. Financial markets were no different, with headlines focusing on Greece and their negotiations to repay national debt.

The crux of the argument between Greece and its creditors is how quickly – if at all possible – the country can repay the growing debts whilst trying to reduce the impact on its people.

From an outside point of view, it is this uncertainty that is causing the volatility. Until Greece comes to either a permanent arrangement or decides to reinstate the Drachma as currency, this uncertainty will cause markets to drop quickly yet bounce back equally fast.

Even now, the FTSE is demonstrating that uncertainty and is currently at a low point for the year.

The fundamentals for investments (ignoring the situation in Greece) remain sound and a diverse portfolio of different asset classes and investment funds will no doubt demonstrate steady growth over time.

So once a decision is finally reached in Greece, whatever the outcome, I believe clients will see their investments take a leap forward.

Clients investments will ride out the turmoil and for many they will benefit from the bounce back when it occurs.

The focus needs to remain long term and the potential for growth remains. We also suggest that the majority of clients’ funds be invested in a diverse spread within the UK and globally (including the Eurozone to some extent) and including non-correlating asset classes such as property and the ‘absolute return’ sector.

 

If you are concerned with your investments and pensions or would like to chat about your options, you know Platinum are only a phone call away.

Whoops! The Top 3 Investment Mistakes We Make

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“To err is human” said Alexander Pope – but in investment, to err can also be expensive. You need to look at the mistakes of others then try to avoid the most obvious pitfalls.

 

  1. Investors can make many mistakes but one of the most common is to follow the herd. When markets are high, they can scramble to invest, thinking they might miss out. When markets are falling, they often sell out. One of the more well known examples of this sentiment driven investing was the ‘dot.com’ boom. Millions of investors parted with their savings, thinking they were missing out on a chance to make ‘easy’ money. Unsurprisingly, the bubble then burst and many scrambled to get out without a thought about what might happen next.

 

  1. Don’t get carried away in the moment – either to invest or to sell. Stories of large falls in markets can make investors nervous – but this is the nature of equity investment and selling on a short-term dip simply crystallises a loss. It can also mean missing out on both the eventual return to normality and the longer-term benefits. Markets will always go down as well as up, so if you are scared by such volatility, take advice. Perhaps equities are not for you.

 

  1. Don’t believe you can time markets – experts agree this is a near-impossibility. Investment should never be gone into lightly. Be clear about your objectives, your timelines and the risks – and make sure your portfolio is run accordingly.

 

Numerous studies have proven how people who have attempted to avoid stock market losses have in fact missed out on some of the largest stock market gains. You cannot predict the future, especially in the short term, so it is important to have a clear strategy over a reasonable timescale accepting that volatility is part of the ride.

 

By focusing on ‘value’ when investing and having clear objectives over the medium to long term, clients continue to see their investment returns grow and have ridden out much of the recent stock market instability created by the global debt crisis.

 

Contact us if you want to ensure your investments are positioned appropriately for the future.

Election result boosts May’s markets

Small and medium-sized UK companies generally outpaced their larger counterparts during May, boosted by the Conservative Party’s narrow victory in the General Election. Investors had expected another hung parliament, so an outright majority removed an element of uncertainty and helped to lift share prices among these businesses, which tend to be particularly exposed to domestic economic developments. The FTSE 250 index achieved new highs in the wake of the election result.

The Conservative majority also lifted share prices in the banking, energy and housebuilding sectors, which had all been expected to fare badly under Labour’s plans for tighter regulation. Later in the month, house builder Barratt Developments increased its forecast for the number of housing completions this year, citing an improved mortgage market and a benign environment for borrowers.

Over the whole month the FTSE 250 rose 3.9%, while the FTSE SmallCap index climbed 2.9%. By way of comparison, the FTSE 100 index edged 0.3% higher during the month. Among the blue-chip companies, ongoing uncertainty over the outlook for Greece helped to curb demand for banking shares during May. Also in the banking sector, the UK government cut its stake in Lloyds Banking Group to 19.93% following the sale of another tranche of shares. Elsewhere, a cut in China’s key interest rate proved positive for the UK’s mining sector.

All in all, the outlook remains favorable and our clients will hopefully benefit from the upbeat outlook.

If you would like to discuss the current outlook, or have any queries or concerns regarding your own situation, please do not hesitate to get in touch with Platinum as always.

Auto-Enrolment – A Lot More Work!

pensions

The government has estimated that 7 million people will not have enough savings once they retire, so proper planning is essential.

In 2012 one of the cornerstones of the government’s pensions reform was implemented with the establishment of the National Employment Savings Trust (NEST). This marked the start of both auto-enrolment and compulsory employer contributions to pensions.

All employers will ultimately have to provide a ‘work place’ pension for their staff.  This is different to previous rules regarding Stakeholder pensions and is being enforced more rigorously with significant fines being levied for non compliance.

The workplace pension could be an existing company pension scheme, a personal pension or a stakeholder scheme. Alternatively it could be the new NEST scheme, which is effectively a cheap, no frills pension plan.

The major difference between these changes and previous reforms is the compulsory element.  For almost every member of staff, an employer will have to:

    • automatically enroll their employees into the workplace pension
    • contribute to that employees pension scheme as a legal requirement.
    • deduct employee contributions from salaries to make sure the minimum savings are made.

 

There are three main ways how the minimum contributions can be calculated. However as most employers will probably choose the route with the least paperwork, that means a total pension contribution of up to 9% of pensionable earnings – and a minimum of 4% must be from the employer and any remaining contribution to be taken from each staff member.

The changes are huge and will become increasingly complex as employers, employees and salaries are rarely static.  It is essential you do not underestimate the administrative impact and financial costs of the upcoming changes.

As an employer it is vital that you plan for the changes ahead and you find out your staging dates. Although the rules change this coming October, every employer will be given a date when they will need to ensure they comply with the rules.  These staging dates are spread up until 2017.

For employees it is important that you take the new rules into account when considering your own retirement planning and that you know how your employer is planning to embrace the new rules.

If this all sounds a little confusing – call Platinum and we’ll guide you through it!

A Clear Path Through The Mortgage Maze

Since those heady days nearly ten years ago when house prices peaked after an impressive growth rate, the UK housing market has been very unpredictable, proving that it is not the ‘get-rich-quick’ strategy some believed. However property remains a sensible long-term investment if certain rules are followed but expectations about possible profits are realistic.

In this slow market, location is still a strong factor but you also need to manage your budget carefully. Choosing the right mortgage is essential, with an adviser helping to assess your individual circumstances and recommend borrowing that offers sustained value for the long term.

Aside from your own home, the buy-to-let market is also a possibility. However defaults amongst buy-to-let borrowers have made it much harder now to find a buy-to-let mortgage with lenders now generally insisting on a deposit of at least 25%.

Most financial experts believe the property market still offers long-term growth potential although returns are likely to be lower than they have been in the past. As demand for housing continues to grow there are compelling reasons for getting involved in buying property, assuming you are settled and know what you want. The challenge is to make sure that you can afford the repayments and upkeep, particularly if interest rates rise in the future.

For first time buyers there seems to be a constant stream of incentives designed to help with getting on the housing ladder.  If someone needs help working out whether they could take advantage of these incentives then they need to get in touch with us at Platinum.

We’ll help put a new roof over your head with mortgage advice you can count on – call to arrange an appointment.

Market Update – Maintaining The Market Bounce…

There is good news for investors as financial markets continue bouncing through the Spring season.

Despite the perceived uncertainty of a general election, UK financial markets have taken the current economic data as positive news of a global recovery.  In fact, the past quarter saw the FTSE 100 break the 7000 point glass ceiling, achieving a new high and hold onto much of the gain.

Economies in other countries seem to be stabilising and building a platform from which growth is possible. There are some setbacks and concerns – such as Europe and Greece – but these seem to be under control as the European Central Bank continues its stimulus plan.

Looking ahead at our investment approach, little has changed since the start of the year.  We know the election will probably cause some short-term fluctuations but longer term, whichever party takes control, and the overall outlook has to be the same balance between austerity and growth.

We think that in the immediate future the largest external influence to client’s investments will be from currency, as Sterling will hopefully strengthen against both the dollar and the Euro.

On the whole we are fairly ‘bullish’, which is finance jargon for being positive, about what lies ahead.  We certainly feel it is worth taking advantage of the global economic recovery although we would always encourage a balanced approach and ensure any of our clients portfolios have a wide spread of investment assets to hopefully cover any unforeseen market fluctuations.

Platinum encourages all our clients to contact us to discuss their plans at any time.  We can then ensure your investments are still in line with your goals and invested appropriately.

Keep it in the Family – Help each other out

There are key times in our lives when we can all benefit from getting an expert to help us with our financial situation. You may have received  a recommendation from a friend or family member the first time you went to see a financial advisor, and that might or might not have worked out, but it will have opened up the door to you and enabled you to find a reliable adviser that now suits you and your family’s needs.

Finding a Financial adviser without any connections can be a daunting task – some people don’t act or get advice because they’re unsure of how it all works… What is a financial advisor? When would I need to use one? How much does financial advice cost and how do I find someone I can trust?

In our new initiative at Platinum we know how important it is to get good financial advice and we know how hard we work to ensure our clients get the best service and advice possible. We pride ourselves on building lasting relationships and we keep communications clear and to the point. We listen and respect your needs and never bombard you with unnecessary amounts of information.  We offer our clients clear advice and consistently work towards providing a service that caters for your specific needs.

So we want to encourage you to share your Platinum connection with your family members, both young and old – why not make it easy for them to find a reliable financial adviser and share the benefits of your knowledge and experience. Ensure your family members get the same trusted financial advice that you get, at every stage of their life.

Whether you have aging parents in need of support or younger family members starting out in the world – you can help them by sharing your experience and supporting their journey.

You can also benefit from reviewing your own finances. Get answers to questions related to changes in your life.

For our valued clients, we want to offer …

  1. A Family review meeting for your elderly parents to discuss their financial needs as they get older.
  2. A Consultation for younger family members – Pass on an invite to help as they consider their financial future and options for planning ahead.
  3. A Personal review meeting for YOU – get peace of mind and reassurance that you’re making the right financial decisions for now and for your future.

 

All you need to do is call the Platinum Team to arrange a meeting for you or a family member and we’ll take care of the rest – 0161 718 8328

“From austerity to prosperity”?

With the General Election a matter of weeks away, the recent Budget managed to hail economic recovery, gloss over spending cuts and serve up a raft of measures designed, among other things, to support savers and first-time house-buyers.

Chancellor of the Exchequer George Osborne announced the launch of a new ‘Personal Savings Allowance’ that will enable basic-rate taxpayers to earn up to £1,000 each year in savings interest, free of tax. He also introduced new flexibility for Individual Savings Accounts (ISAs) that will allow savers to withdraw money and replace it – in the same tax year – without losing any of their tax-free allowance. At the moment this provision will apply only to cash ISAs. Elsewhere, Osborne revealed measures designed to help first-time house-buyers with a deposit – through a new ‘help-to-buy’ ISA; the government will add a bonus of 25% to the saver’s contribution, to a maximum of £3,000 on £12,000-worth of savings.

Further reforms to the pensions system elicited a mixed response. From April next year, pensioners who have already purchased an annuity will be able to sell that income to a third party in exchange for a lump sum that will be taxed at their marginal rate instead of the “punitive” 55% rate. Meanwhile, the Lifetime Allowance for pension contributions will be cut at the same time from £1.25m to £1m, saving the Treasury £600m a year.

The personal tax-free allowance will rise from £10,600 in 2014/15 to £10,800 in 2015/16 and to £11,000 in 2016/17. The Treasury calculates this will cut income tax for 27 million people. The threshold at which individuals begin paying higher-rate tax will rise from £42,385 to £43,300 by 2017/18. Elsewhere, schemes to avoid inheritance tax via deeds of variation will be reviewed.

On balance the announcements are positive news for the majority of Platinum’s clients and we look forward to bringing you more details on each point over the coming months.

On a broader economic outlook, the UK economy expanded more quickly than any other major advanced economy during last year, registering growth of 2.6%, which is somewhat lower than the 3% growth forecast in December 2014. The Office for Budget Responsibility’s forecasts for economic growth in 2015 and 2016 were raised to 2.5% and 2.3% respectively, while its forecast for 2017 was cut to 2.3%. Debt as a share of GDP is falling more quickly than previously forecast, and the Chancellor therefore intends to end the squeeze on public spending earlier than expected. From 2019/20, public spending is set to rise in line with economic growth.

As many people are aware the recovery is still underway and there is a long way to go before the UK economy can be said to be operating in the ‘black’.  Whilst there will likely be further budgetary cuts, there are signs that our economy is building and hopefully the impact of any cuts will be lessened.

As always we welcome the opportunity to discuss the overall market situation with our clients as well as their individual plans.  We would urge any concerned clients to get in touch with the team at Platinum.

Have You Lost Your Money?

Did you know about the hundreds of millions of pounds sat quietly in ‘lost’ bank accounts and ‘lost’ pension savings?

Over the years people can hold different bank accounts or savings accounts, which are rarely fully closed and can often have funds still in them.

Back in 2008, a website was launched to help everyone find any lost bank or building accounts and National Savings products, such as premium bonds.  The ‘My Lost Account’ website offered a FREE search facility to connect people to their lost savings.

Despite more than 300,000 people using the service and it returning £645 million to their original owners, this great service still remains unknown.  If you, or anyone you know, may have an old lost account then simply follow the link to the website and use the FREE facility to reclaim your money and savings.

In a similar fashion, it is possible to trace pensions using the Department of Work and Pensions website.

It is important though to be wary when tracing important information as there are many sharks and predatory sites looking to prey on those searching for lost moneys.  Therefore I would recommend only using the DWP pension tracing site which can be found by clicking here…   https://www2.dwp.gov.uk/tps-directgov/en/contact-tps/pension-tracing-form.asp

Ultimately the government and insurance companies will use any unclaimed funds as they try to tap into the billions of these ‘orphaned’ assets, so it is important that everyone reclaims their savings.

Once you have done so, contact Platinum and we’ll advise you what to do with your windfall!