Investing can appear complex, but by starting with the evidence we can identify a simple set of rules that allow us to structure your portfolio to navigate through the years ahead and the variety of markets we will undoubtedly encounter together. If you stick to these rules, take a long-term view, and have the discipline and patience – with our help – to see the plan through, you have every chance of being richly rewarded.
Around 50% of our clients have generated their wealth through their business interests. We know how critical it is to prepare for the time when you come to sell all or part of your business. In this blog we explain how focused preparation can make all the difference to your ‘happily ever after’.
If you are an entrepreneur approaching retirement, you might have already estimated how much you need from the sale of your business. Chances are, this is a significant sum, but calculating the actual amount to produce the income you desire can be difficult. Here’s how we approach this with you:-
Of all the financial challenges and concerns that we face over our lifetimes, avoiding running out of money in retirement probably sits at the top of the list. Knowing what you cannot control and understanding what you can, provides some insight into the complexity of – and solutions to – retirement planning.
In day-to-day life, we tend to make a connection – largely correctly – that you get what you pay for. Yet when it comes to investing, broadly speaking, the exact opposite applies.
Different parts of the market do well at different times, but no-one really knows who the future winners are, not even the professionals. Naïve investors take good short-term performance as a sign of skill.
What do we fear most? A falling coconut whilst sitting in the shade of a coconut tree or running into Jaws whilst in the sea? Humans are irrational and find it hard to place risks in perspective, in part because they involve numbers (which many people hate), are influenced by fear or recent news and often depend on the way in which they are framed, to name just a few of the challenges.
Leverage, often referred to in investing as a ‘double-edged sword’, is another word for borrowing money to own more of an asset. Much like a mortgage on a house, it enables individuals to own a higher value of an asset they would otherwise be unable to own, but it does run the risk that the value falls such that one ends up owing more than one owns (coined ‘negative equity’ in the housing world). This is never a good place to be.
Complex problems rarely have simple, binary choices. All choices require trade-offs. The reality is that most of us want to take steps in the right direction, particularly around climate change in all aspects of our lives and struggle with the trade-offs we face.
In the past twelve months, we have been reminded of some useful lessons that can – hopefully – make us all better investors. Several key lessons stand out for us.