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MAP Blog

Bydylanharper95

Investing money

I found it very strange on reading the financial sections of my Sunday paper recently, where there were a couple of sections from what are called stock-pickers.   These are people who recommend you to buy company X shares because of this event or that trend, and that never ceases to amaze me, but it is so far off the mark I have to admit. 

I realise that these people do this with the best of intentions and they are only reading the economic indicators and making their suggestions based on that, so you might get someone saying that because country X produces a lot of chips that are needed for the cars that we can’t buy, then we should invest in companies in that area.   It may be that another company has changed the process for what they do and the new process is more efficient – so the suggestion then is to buy those companies shares at their current low value and then sit tight and watch them grow. 

Now the first thing I have to say about this is that what these journalists are suggesting is buying individual company shares because of whatever reason and whilst they make a logical case, I would say that investors should take a step back and just have a wee think about things.   First of all when you invest in a specific company you need to do a whole lot of research on that company before you invest and this could involve reading P&L’s and Balance Sheets to get a better understanding of their financial position.   Secondly it could also involve reading up on their product specifications to see if you agree with what has been written.   All of these take time and effort and I would say are probably out of reach of the vast majority of investors.  Conclusions made also have to be reviewed at various intervals as well.     

That’s why as an IFA, I always look at funds because each fund will invest in say around 50 – 100 companies, and so an investment in a fund is less specific and so carries less risk.  That means that a review can concentrate on the important things like investment performance – and that’s what we concentrate on doing at MAP.     

When we look at funds, we don’t really care what geographical area the fund operates in, or if it is for a specific product like technology or health, our main concern is investment performance – full stop.   MAP only uses funds that have both a good long-term performance (over 5 years) and also a good short term performance (over the last 3 months) and we try hard to identify and use consistent funds that reflect BOTH of these.    

The final thing to remember when you invest money is that you can be guaranteed that everything WILL change, so you need to be flexible to adapt your investments to changing circumstances, and at MAP that means continually monitoring investment performance – long term and short term.  

                                                   Research is the key – and you need to do this repeatedly  

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk  

Bydylanharper95

Investing money

The GLOBAL markets just now are all on a low probably stemming from low employment statistics in the US and there is sweet nothing that anyone can do about this.     Admittedly it would be different if say the US market was down and other markets were up as all you would need to do then is avoid the US – but needless to say it is not that easy.    The US is the biggest economy in the world, and if it shivers, then everyone else could catch a cold.

When you look at global investments, it is estimated that at least 50% of a global fund will be US based, so no sense in going there to avoid the US.    You can look at other countries like Japan, Pacific, Far East, European – but they all to a certain extent rely on the US market, so as I said earlier, when the US market stutters, then all will stutter.   I have a wee expression when I do any investing for clients and even myself – and that is “when in doubt – don’t”.      At times like this when all markets are falling, I defy anyone to say that a specific area is good, and it is very much like moving money from the frying pan to the fire.   When in doubt – don’t.

Right at the moment when things are rather unsettled, I can’t say with certainty that this fund or that fund will be better and will give a client growth, so I basically sit on my hands and don’t move any money at all.    It’s not as if I am sitting doing nothing, because what I am continually doing is my research on the funds available, and watching the trends of valuations/prices before I start trading again.    

Only when I see some grass roots appearing, do I make a move and even then it is cautious.  When I see things improving – or at least it looks as though they are improving, I will invariably invest my own money where I think it could do best, keep my eyes on it for a few days, and if at the end of the period it is still doing well, then I will start to move clients funds- and up to date, this has always been successful.    

You can rest assured that the investments WILL come back, but how long they will take to do that and over what timescale – no-one knows.   So where you are dealing with the unknown like this, you need to take things easy to start with and don’t jump in with two big welly feet.   

Research is the key – and you need to do this repeatedly.

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Investing to get something like 14.51% a year

When anyone advertises fund performance the Financial Conduct Authority lays down the ground rules that this must reflect a minimum of 5 years otherwise it would be all too easy to quote a performance that is the proverbial flash in the pan.   What the regulator is looking for is some kind of reliable indicator of performance over a period and that’s why they specify a minimum of 5 years. 

Bear in mind that past performance is not necessarily a guide to future performance and you might not even get back your own money.    

When MAP does any investments for clients, we pick a range of funds, so that we can hope that any value falls are compensated by other funds where value gains.   By taking a spread of funds you are attempting to reduce the risks involved.  Furthermore we monitor the funds used on an ongoing basis and if a fund is not doing what it is supposed to – then we get the clients permission to switch and we then put that money into another fund that does perform.      We are continually reviewing the funds used and only keep clients in half decent ones.

We would say that there are two important things to do when you invest money and this is 1.  Always take a spread of funds and 2.  Always review the funds used.    If you do these two things on an ongoing basis then we believe that you will get the most out of your investments and just to show you what I mean, our portfolio over the last 5 years achieved growth of 72.57% and that is equivalent to 14.51% p.a.     The FTSE 100 over the same period grew by 29.80% which is a flat rate of 5.96% p.a. – so what would you rather have ? 

MAP does all the background work – so that you don’t need to.

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Astute Invest Ltd is an Appointed Representative of Money Advice & Planning Ltd who is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@astuteinvest.co.uk   

Bydylanharper95

Investing, is straightforward – right?

I don’t doubt that many people will think that investing is relatively straightforward and they would do a good job themselves, and to be honest on a lot of occasions that “might” just be true – but it certainly doesn’t apply over the last few months.

Up to the middle of September I would say the markets were reasonably stable – if to be honest you can ever use that word for the markets, but they were not terribly volatile.  That cannot be said for the last few weeks though when we made up for all that “lost” volatility.    The Dow Jones over a few days lost something like 3.2% and that’s an awful lot in just a short period.  Now bear in mind that American stocks can make up something like 50% of global stocks and that will let you see how this one change can ripple into other areas.    A lot of countries and economies will also be reliant on the American market and so their indices will also feel the pinch as well – and so it goes on.    America after all, is the biggest economy in the world, so what happens in America will affect everyone else – even the UK. 

Now if we as stock-pickers did a knee jerk reaction when the Dow falls, then in my opinion that would put you in a worst place because unless you specifically know why the Dow fell – then you should do nothing.   With the likes of investing, I have a wee saying – when in doubt – don’t, and this basically goes for everything.    Unless you know in detail why an index fell – you should not do any knee jerk reaction at all and just sit tight.   Let things pan out and once they have settled THEN you can act, but not before.  If you did do a knee jerk reaction you could be making the matter a lot worse – so sit tight. 

Once things have settled, then you need to do your analysis again so that you can maybe see what the effect has been –  has some funds risen – what has lost – and if you do your research you will be able to see the trends shaping up and that will point you in  the direction where you should be going.   You might see global funds falling, tech funds rising – it’s all a question of doing your analysis and trying to make some sense of the end result. 

That’s what we do at MAP, and what we have noticed of late is that some UK funds seem to be getting a bit stronger, European funds are starting to grow a bit better, technology funds have fallen back a bit – and so on.   

At MAP we do our research regularly, so that we can identify what funds are getting better and so might come into our vision for putting some money into them – as long as they have some consistency behind them of course, otherwise you might just get a flash in the pan – so to speak.     

When we invest money for clients we do our research time and time and time again – because we need to be sure that our clients will benefit from the funds that we use – and you can only choose funds that you have researched.    INVEST THE MAP WAY.    

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Moving Pensions

Moving a defined contribution pension (DC) is not as easy as some clients think, because advisers invariably have to do a fair bit of groundwork, and it’s not as simple to merely fill in a form and off you go.

What any adviser needs to do if they are looking at a transfer is justify it, and this means that you cannot just move a pension to get a commission and then walk away once you have the money. What we need to do, is show the return that you are getting from your existing pension, and then we need to show what kind of return you would get from what is being proposed, and only if the proposal is greater than the existing – can a transfer be done. So, if you are an individual out there and you are thinking of moving your pension, then take a minute and just check that you are supposed to be getting a better return. If you aren’t then you shouldn’t be moving it.

If you are looking to move a defined benefit pension (DB), then the rules are slightly different in that any move needs to suit a person’s finances better, and if it doesn’t – then no move should happen. The one additional constraint about moving DB pensions is that they can only be moved prior to retiring, and if someone wants it moved to access the tax-free cash, or change the beneficiaries for example, – then it should not be moved.

I have had a number of people approach me and they have a variety of reasons – but by and large I need to ignore what the client wants and work to FCA rules. Bear in mind that a pension is for retirement – and that’s why we would only be allowed to move a DB pension if someone is about to retire. No other time. I have had people telling me that they would like to use the tax-free cash for house refurbishments, or to go on holiday – and they are not an allowable reason. I have had a few people come to me and tell me that they have a large fund, and because the transfer value offered is really good – they want to move it now before this is potentially reduced, but guess what – that’s not allowed either.

We can only move a DB pension when a person is 55 and over, and is within 12 – 18 months of retirement. A DC pension can be moved at any time once you do the analysis of returns.

This logic is all meant to protect people, more often enough from themselves to be honest, and to get people to use a pension IN retirement. No other time.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Apathy

The biggest danger that I see all the time – and almost in every direction is APATHY.

On a few occasions when I have been asked to transfer money from a self-invest platform to our advised platform, I come across cases where people have made their investments some time ago and have never changed it in a long time, and they wonder why it is not doing as well as they thought.

We have a number of clients ourselves that we have contacted to ask them for their permission to switch funds from a poor performing one to a better performing one – and we don’t always get a reply – or even a quick reply.

And then there are numerous people that we tell about our investment process that has produced good returns because we are continually watching what funds perform and what ones don’t. We spend a lot of time on our research so that clients can benefit from this with the right selection of funds, what frustrates us is that some people will invariably still go for the cheapest option in the marketplace solely to save money which kind of defeats the purpose of investing, as the saying goes ‘you only get what you pay for’. It would be interesting if those self same people looked at things in say a years time and looked at the return they got from their cheaper option against what M A P might have done – but I suppose that this is viewed as being theoretical. In an ideal world, they would have been able to see that M A P would have given them better value for money – but as stated, for a lot of people this would be theoretical.

To invest money successfully, you need to do your research again and again and again – in fact you don’t stop doing your research. This is how you make money – not doing a one-off bit of research and putting your money into funds and then leaving it there for God knows how long without any changes.

A lot of people start off with the best of intentions, but guess what – that vanishes like the proverbial snow off a dyke given a few weeks and APATHY kicks in.

If you don’t want to look after your investments properly – then give it to M A P who will.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Asset Allocation

Asset allocation is the phrase used by financial professionals and might sound fancy – but all it is – is a spread of investments.

When I place a persons investment money into funds, it’s common sense that you don’t put them all in the one area. Say for example I was investing £100,000, then I would invariably use 10 funds, and I would not put all this money into 10 different UK equity funds – that’s the old saying about putting all your eggs into the one basket.

What I would do for this person is pick a range of areas and types so that you get a spread of areas and if bad news hits one area, then it will only affect any investments in that area but not everything. Let me give you an example of what I would do today –

LOW RISK FUNDS

  • UK based Sustainable fund
  • Global Sustainable fund
  • UK Growth portfolio

MIDDLE RISK FUNDS

  • American growth
  • European Growth
  • Global Opportunities

HIGH RISK FUNDS

  • Global Startups
  • Global Technology
  • American Growth

Asset allocation means that you allocate your assets to a wide range of possibilities, and if one fund fails – then it doesn’t bring the house down. The only way to do logical investing is to do such a spread AND to continually keep your eyes on things as everything will always CHANGE.

All you need to do on an ongoing basis is ensure that you always have a spread of areas, types of funds etc – so that you can capture the good areas and minimise losses. There is nothing scientific about it – just plain old common sense.

What we do at MAP is invest a clients money and then monitor this at regular intervals and if economic conditions change and a fund starts to lose money or even go down in value, then we contact the client and change it. In our opinion this is the ONLY way to invest money. What would you rather have ?

1. Somebody carefully watching over what you invest in and adapting it to current conditions OR

2. Put money into an investment and then walk away and do sweet nothing

I know which one I would do – and that is what MAP DOES.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

‘Aren’t you the client’?

Somewhere in the mists of time the relationship between advisers and their respective firms and networks has in some cases sadly eroded.

Advisers themselves treat their clients with respect and professionalism building a binding long-term trust between both parties.

So ask yourself this question ‘Am I being treated the same way’? Do you get the same respect and trust, do you feel valued as a client because when all is said and done that is exactly what you are? You probably pay a lot but do you get a lot in return?

At MAP we approach this in a different way, our team are at the core of our business and central to everything we do. We work closely with them to help them build a successful and profitable business with a raft of support tools designed by them, our view is that they know better than us what they need and we work together to build our support model to the benefit of the whole business.

At MAP we are proud to display our ‘Investors in People’ award signifying we commit to making work better for all our team. This for us epitomises our commitment to how we interact with individuals and treat them in a fair and supportive way.

Does it work………NO ONE EVER LEAVES MAP AND THAT ALONE SPEAKS FOR ITSELF

If you want to feel valued then give Ian a ring on 07788-566547 and let’s discuss how we can bring a smile to your face again, our advisers don’t sink, they swim.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Ian on Andrew on 07788 566547 or ian.clisby@mapfinances.co.uk

Bydylanharper95

Change

Everyone it seems ignores change, but in my opinion, the only thing that is guaranteed – apart from death and taxes of course – is that EVERYTHING WILL CHANGE. This is not a maybe or a might but WILL change.

What I have never understood is why people invest money and then just basically leave it alone for the cobwebs to attack it at random as that is just asking for trouble. The only way that returns are likely to go then are down the way, so why leave it alone?

OK I will admit that you might take out a mortgage fixed for 5 years and you won’t change that, but that is to cut your long-term costs, so it is logical. But can you imagine a Building Society giving YOU a mortgage and leaving it for 25 years at the same rate – absolutely no chance, because they would invariably lose money over the long period. What they would do is change this as and when base rates at the Bank of England changes, so that they continue to make money on a mortgage, just as any business would do. So why oh why do people invest money and leave it invested for a long time without change – apathy? laziness? lack of knowledge? Who knows why people do this, but I have come across a lot of people who do this with their pensions and investments, which I can half understand, only because the pension is a long term savings contract, but they will still lose out nonetheless.

From cases that I have seen over the last few years, a lot of investments and pensions that have been left to stagnate will get around 2% to about 4% per annum, whereas if something is actively managed, then you would be looking for 6% to 8%. That is a world of a difference, and makes you want to shout some people out of their indifference. A lot of people will merely stumble through with their 3% or 4% and think that they are doing not too badly – but this is because they do not know what is out there to compare it to.

My message is simple – EVERYTHING WILL CHANGE, so if you have investments or pensions, they need to change as well, and if you don’t – you will lose out.

What we do at MAP is invest a clients money and then monitor this at regular intervals and if economic conditions change and a fund starts to lose money or even go down in value, then we contact the client and change it. In our opinion this is the ONLY way to invest money. What would you rather have?

1. Somebody carefully watching over what you invest in and adapting it to current conditions OR

2. Put money into an investment and then walk away and do sweet nothing

I know which one I would do – and that is what MAP DOES.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute an endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Investment Risk

Let me say first of all that when anyone invests money there WILL BE SOME RISKS INVOLVED. How much depends on the individuals choices and approach. Let me explain. 

ALL investments have risks involved and as you can imagine – some risks are higher than others. What we do at MAP is divide all funds into 5 categories – although we mainly use only 3 of these (2, 3 and 4). 

Category 1 risk is the situation where you have very little risk at all such that the chances of losing money are small if not negligible. If you choose this category though you will get very little growth in return and an example of this is bank interest, and this explains why this is not used a great deal as returns don’t cover costs. 

Category 2 risk is where someone is looking to invest and make returns at least more than inflation, and the chances of loss are not that high. Such investments are not in high volatile areas – hence the low-risk rating.   

Category 3 is middle risk and there is a chance of losing money, although no-one will say how much.    

Category 4 is high risk where you could lose a significant amount of your investment and finally 

Category 5 is where you could lose everything, and that’s why we very rarely use this one – as you can imagine.     

At MAP we do a spread of funds when we invest a clients money because that spread alone will reduce risk, and I would say that anyone investing should not put all their eggs into the one basket – but take a spread. 

When we invest a clients money, it is the client who chooses what risk levels they want and what they are comfortable with, and that choice is not cast in stone and can be changed as and when the client wants. This ensures that the risk levels are kept to comfortable levels.  

When we do investments, we do a lot of research on what funds we are going to use, and this alone will reduce risks, because we only use those funds that have a good consistency over time – thus reducing risk.     

Remember that at the end of the day, you will only get a return if you take some risks, so there will always be risks there – you just have to watch them, but if you control things along the lines discussed here, you can reduce risks levels to what you are comfortable with.   

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk