This is important. I daresay you are getting lots of emails saying the same but please take 10 minutes to settle down with this page and with your money, in all its forms (debt, savings, pensions, investments, fine art etc) in mind.
First, if you have any concerns at the present time with any of your financial interests, holdings, assets, accounts or anything ‘money’ then please, please, email me and I will respond as soon as I can.
If it comes to mind, email me, or text me (07812-195029) or even call!
Secondly, we can operate remotely if the need to do so arises. This means we will have access to your information and also to virtually all the providers who are all mostly working from home remotely and online.
Don’t worry about whether you think we might be under pressure helping others – email us, text me or even call.
These are testing times. It is easy to become anxious or worried about your money. We are here to help allay fears and concerns as much as we can, with information and support.
We will do all we can to answer questions, queries and concerns – remember, you can email me, text me or call me.
Right now:
Investment and Pension values:
World markets have fallen sharply as you probably know. Prior to the coronavirus pandemic, the UK economy was doing well and this situation was forecast to continue. Likewise the global ‘village’ economy.
Challenges like the price of oil and ongoing trade tariffs would present challenges and volatility as they always do.
So without Covid-19, we might have expected more of the same.
With Covid-19, the markets have no idea what to expect so they respond as they always do – with significant uncertainty and lack of confidence. They drop.
Our recommendation is to hold.
The wider consensus is that the world and her economies will recover as the pandemic gets under control.
Most of the investment and pension portfolios we manage and administer are built with the individual’s risk profile at the forefront of our considerations.
They are also usually heavy with Defensive assets as opposed to UK or global stocks and shares.
The aim of this is that when markets go down, your portfolios are cushioned, if you like, against the fall.
For example, where we have had time to compare portfolios against, say, the FTSE 100 index, where the latter had fallen by 31% at the start of the week, a typical portfolio we manage, had fallen 7.3%.
OK, markets have fallen again since we carried out the analysis but the difference between what the news tells you about how far the markets have fallen is not typical of most of our portfolios.
Note: it usually takes around 8-20 working days to sell an individual’s funds. So even if you wanted to “catch” the market at what you thought was an opportune time, you’d likely miss it.
Furthermore, when the time comes to get back in the market, you’d probably miss it. After a correction/crash/slide, most returning investors miss the moment and are further delayed by the process itself.
So, do hold on. But remember, if you have a question or are concerned, then please email me, text me, call us. We are looking at this situation all the time.
A great time to invest?
On the face of it, yes. Markets are much cheaper and if the consensus is that it will recover, it could be a good idea to invest some spare cash.
Do be clear on your motive though and also your affordability.
Sometimes, individuals are taking withdrawals from their investments they don’t necessarily need. You can stop or amend these payments at any time. Just let us know by email/text/phone.
End of year tax planning.
This is a challenge for us. With the emphasis on more important things, there’s been little noise about whether the tax year end (5th April) will be extended to accommodate the present crisis.
Actually, for most of our clients, we perform elements of their tax planning over the course of the year. But there are those for whom we have to wait for the end of the tax year to beckon before we can enact any planning.
If you have a question about investing before the end of the tax year, then do let me know by email, text or phone call.
Concerns over potential income/earnings shortages during the Covid-19 period
This is important.
If you are concerned that your earnings might be threatened over the next few weeks/months because you cannot work, or have limited earnings potential then I believe you should address this issue positively and decisively as early as possible.
Make sure as much as possible that you have enough savings for 3-4 months.
Where you have cash savings, check how easy it is to access and whether it can be paid direct to your bank account.
Mortgage payments
You may be aware that HM Government has instructed mortgage lenders to make provision for borrowers to stop mortgage repayments for 3 months. If you are at concerned, stop your direct debit – build your savings to cover the purchase of more important things.
Investment and pension regular contributions
If you make regular pension payments, contribute to a monthly ISA or savings plan, you can cancel these instructions. They can be restarted at any time.
You might think this is a good time to invest (see above) and that you might make a profit from a little personal hardship – I’m not sure you can make enough profit to justify having to go without over this period.
Make sure you have enough to cover for 3-4 months initially.
Insurance premiums.
Care needs to be taken here – you don’t want to lose valuable cover unless you can absolutely afford it. Usually you can cancel a direct debit instruction for up to 3 months when you’ll need to bring the payments UpToDate to avoid cover expiring.
This is an imperfect science and you won’t always be told when your cover is about to expire.
So check with your insurer(s) what happens if you miss a payment. You can ask us to help for life, income protection and critical illness insurances.
But don’t think it’s too much hassle. Some premiums are quite expensive and saving these might well be so important.
Do check your bank statements for other potential savings. You might be surprised at what you find.
Once again, if in doubt, give us a shout! Email, text, telephone.
Get a loan
If you are concerned about potential shortcomings in your ability to meet costs and overheads over the next few months, then get a short term loan (36-60 months) where you can pay back at any time.
Interest rates are low, of course and you might be able to defer your first loan repayments (I haven’t seen this offered but it wouldn’t surprise me in the current climate).
However, it is quite likely lenders will use credit checks so if you stop your mortgage payments, you lender might be agreeable but they might still note it on your record.
So, if you think you might need a loan, get it early. You should always be able to repay it before the end of the loan term without penalty.
Also note that these are loan repayments you might be able to get any payment holidays on, in the event your income reserves run dry.
Employers and small businesses advice.
Financial assistance has been promised by HM Government although I gather this is not available just yet – early next week is the target I gather.
You may be able to get this help from your accountant but I will aim to bring this information to a future update as and when I have it.
Summary
Overall, your health and safety is as paramount now and for the next 12 weeks/foreseeable future as ever.
Don’t leave it too late to make a financial plan for your day-to-day needs.
If you want to run it past us, then do so (by email, text, phone).
In fact, let us know if you have made any changes to your plan so we can provide any thoughts, observations and help or guidance.
FINALLY
Most of you will know the majority of our clients are doctors, dentists, GPs, medics, working, and semi-retired.
While we all have a role to perform at this time, I am sure we wish them every support and strength as they undertake such a huge task which is to protect us and care for us as we enter a critical period in the fight against Covid-19.
To you all, stay safe and be healthy.
Nick Miles