SPRING NEWSLETTER FEBRUARY 2023
Has Spring Sprung?
This month I thought I would comment on a couple of things that might help when you hear or read things in the media. Many pundits are starting to question how to invest again and the ‘Should I be Passively or Actively invested’ conundrum. Many are spinning an investment value recovery or further volatility so let’s look at those.
Investing Passively or Actively.
The long-debated question – should we invest passively (the efficient market hypothesis) or actively (the efficient frontier model) – has niggled on since I have been in investment advice since the late 1980s. As its back in the financial press, I am dropping it into our Newsletter to ensure you have our view.
So what do we think? We think the press and some advisers over complicate this on purpose. It’s not that complicated, passive investing works better over the long term generally but if you have a short term, say 8 years or less, more active is the way. For example, If you had bought a passive tracker, tracking the FTSE 100 5 years ago, you would today be unhappy. If you bought it 10 years ago you would be happier, if you bought it 20 years ago you would be very happy.
It’s really that simple. If you have around 19 years to invest and you will not panic when the investment gets bouncy (passive investments have no brakes when they are off down the volatility hill), then a passive investment looks good. But what to track? Even over the long term a one index tracker could go badly. So, a mix of Passives / Active Passives looks better.
If you conversely choose to be active only, over 20 years the charges will take away a reasonable chunk of performance returns.
Well for most of our clients, they don’t like to see all their money being very bouncy, but they can take some volatility for some of it. They are investing for the rest of their lives so usually for some time yet. So, a blend of these two approaches as created by us in 2019 in our own Wealthlineinvest Managed Portfolios, offers a solution for many.
We offer options across the risk levels which offer a blended and highly managed option to take the argument and guess work out of the mix. They aim to smooth out some volatility through bouncy times but keep costs reasonable. They are managed by two of the country’s (and world’s) leading investment groups and we also review them every 12 weeks.
So we solved this argument in 2019 and its working very well for our clients. Of course, we still have fully passive and fully active options from other portfolios and funds, and also active passive options which are a cheap low activity option. All these solutions mean we can meet your needs. But we will spend our time finding out what you need rather than getting involved in arguments that seem more about filling media space than information. Active or passive? We choose both.
The Markets are all green are we in recovery, they are all red are we on the way down again?
Let’s take a look. Beware the short-term trend was beaten into me in the late 80`s. In the late 80`s we had just had a really torrid time in 1987, but the fund managers were split down the middle with some crying out that things were cheap, and some doomsaying that more bad news was to come. My manager at the time, who was very knowledgeable on investments said, who knows what’s next? He said the last year gives us little useful information. Things look cheap but could get cheaper so don’t take a fixed position based on short term noise. I clearly remember him saying ‘don’t act as if you are god but add up all available information and decide where you sit’. So, looking at things now I am optimistic. The last 5 years have been a bit of a non-event and people who invested last year may now feel unhappy, but it’s all a bit irrelevant (in market terms not personal as I hate short term losses as well). Markets and returns need to be measured in 8-year periods as a minimum. I know everything in financial services quotes 5 years as a reasonable investment term, but I have been saying 8 years for ages and the last 5 to 6 years have proved me right. Our view is we are optimistic that anyone who invested in the last few years will be happy 8 years after they invested and we hope, but don’t know, that we are in a sustained recovery. Of course, we don’t know anything for certain – that’s the nature of life that tomorrow is unknown, but neither does anyone else unless they have god like powers.
So, our view is in the face of falling inflationary pressure and some confidence returning we feel optimistic as I say.
Staff
We are pleased to welcome Jasmin to our team. Here are a few words from Jasmin, while being creative most of my life, I’ve began my financial services administrator apprenticeship in hopes of becoming a financial executive and possibly starting my journey to a financial adviser. While studying, I am also working beside Lisa and Jennie to further my training. When I’m not in the office, I tend to be either in the kitchen cooking and baking up a storm or writing stories and covering canvases.
Our adviser Eamonn Dorling organised planting 105 trees in Whittlesey on Saturday 10th, known as The QE2 Platinum Wood, to mark the Platinum Jubilee and her Green Canopy initiative. 90 indigenous species are in the central area, plus 15 fruit trees forming a Community Orchard. Donations funded trees, also Whittlesey Town Council. Volunteers planted the trees, and recognised experts in this area of tree planting provided specialist advice.
Guide Dog Grace
We are proud to announce that we are sponsoring a guide dog puppy called Grace.
We will be posting regular pup-dates about Grace, and adventures her teddy go on.
So far teddy Grace has been to France, Belgium, The Netherlands, Germany, and Poland!
Circus Star
We are thrilled to announce that we have sponsored 2 children to go to the circus.
For over 35 Years Circus Starr has been holding accessible and inclusive circus shows. They do this because they know that there are vulnerable and disabled children who, through no fault of their own, sadly miss out on the chance to enjoy live arts.
They’re able to hold a magical indoor show thanks to the generosity of local businesses. With support they can provide a performance that has the power to help those who usually feel isolated, to come together and experience happiness.
Cyber security
Cyber security is the means by which individuals and organisations reduce the risk of becoming victims of cyber-attack. Cyber security’s core function is to protect the devices we all use (smartphones, laptops, tablets and computers), and the services we access from theft or damage. It’s also about preventing unauthorised access to the vast amounts of information we store on these devices, and online.
With the increasing numbers of cyber criminals and attacks it is more important than ever to take steps that can prevent cyber criminals getting hold of our accounts, data, and devices.
We have listed below 5 steps to help to protect you from cyber security threats:
1)Backing up your data correctly
Cloud storage is a model of computer data storage in which the digital data is stored in logical pools, said to be on “the cloud”. The physical storage spans multiple servers (sometimes in multiple locations). Cloud storage providers are responsible for keeping the data available and accessible, and the physical environment secured, protected, and running.
2)Protecting against malware
Malicious software (also known as ‘malware’) is any software intentionally designed to cause damage to a computer, server, individual, or computer network. This includes viruses, warms, spyware, ransomware etc. By contrast, software that causes unintentional harm due to some deficiency is typically described as a software bug
3)Keeping the devices secure
Switch on password protection. Always lock your device when not in use. Keep your device and your apps up to date. Make sure to do those updates sent from your software provider i.e. Microsoft or Apple. Don’t connect to unknown Wi-Fi Hotspots
4)Creating strong passwords
Passwords, when implemented correctly, are a free, easy and effective way to prevent unauthorised users accessing your devices. Make sure you switch on password protection. Use 2-step verification for ‘important’ accounts. Avoid using predictable passwords. Use password managers or store in your browser. Change all default passwords
5) Defend against phishing
Phishing’ is when criminals use scam emails, text messages or phone calls to trick their victims. The aim is often to make you visit a website, which may download a virus onto your computer, or steal bank details or other personal information. Criminals use information about you that’s available online to make their phishing messages more convincing. You can reduce the likelihood of being phished by thinking about what personal information you post and by reviewing your privacy settings within your social media accounts.
Online can be rewarding, fun and educational – just take these few simple steps to avoid becoming a victim