It’s often best to look at what we have, rather than what we haven’t

Category: Financial Life Planning

Wave after wave of bad news seems to be hitting HMS UK at the moment, many of us feel that it is relentless, and it’s just not fair. There is a daily ‘crisis’ as my neighbour points out most mornings.

We might ask ourselves :

“How do others get all the good fortune?”

“What’s going to happen next?”

“The next thing might have an even bigger impact on us!”

Mortgage headlines are the things which first sprung to my mind today :

“Lenders withdraw from the market” “no deals available”.

Or written another way – Lenders are repricing in line with recent changes (seems a lot less dramatic – but of course that doesn’t grab the headlines).

If you are not in the market for a mortgage just now, it may not have too much impact – you didn’t need a mortgage, so you are no worse off.

Investment markets are volatile – that’s their nature, and as you know, we expect this volatility to happen, time and time again.

Between the volatility which grabs our attention (temporary reductions in value) we see the reward of growth. Nobody can predict when cycles will begin and end, how deep or how high they will go, but we do know that remaining in the life raft and not trying to swim for it, is always the best option – that shoreline can often be a lot further away than it first looks.

The life raft is a globally diversified portfolio, investing in the great companies of the world – whose goods and services people will continue to buy tomorrow, just as they did yesterday.

As far as bad first weeks in a new job go, it seems as if the Chancellor may at least win one award.

We shared the early ‘highlights’ of the mini budget live in our recent client event – in particular, the removal of the 45% rate of income tax seems to have hit a nerve with the country, overshadowing the fact that there was also a reduction of the basic rate of income Tax.

This isn’t about whether the bankers deserve to have bigger bonuses and how that may seem unjust, or if the 1% wealthiest in the UK have benefitted far more than everyone else – we know there will be plenty of opportunities to deal with those emotions when the next election comes along.

Perhaps the reflections at this time could be how it really changes my life – not being influenced by the headline grabbing, next crisis generating news, but looking at how fortunate we still are. Maybe we still have enough, maybe the lack of available mortgages don’t actually impact on us in the way we might think.

Headlines cause uncertainty, uncertainty stimulates emotion, emotion can lead us to behave in an irrational way. Cutting that line short – headlines can make us irrational.

As I put pen to paper, the Bank of England have just announced an emergency bond buying programme for long term bonds. That certainly drew my attention ahead of a damaged gas pipeline, and a deadly hurricane heading towards Florida. Whilst these actions are unprecedented, they address the issue with 20-30 year term bonds which are not held in our Serenity portfolios (which are typically 4-5 years duration bonds).

Just as in 1974, 2001, 2008, Brexit and 2020 this may feel different to where we have been before. Taking a calm measured approach and allowing markets to recover from the uncertainty is always the best course of action.

Don’t join in the daily crisis listing, reflect rationally, and if you have any worries whatsoever, speak with your Serenity Financial Planner.

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