ViewPoint: Very Long Investment, Pensions and Retirement; plus 7 Days to Friday 11th October 2013

S e w e l l B r y d e n G u n n ViewPoint: Very Long Investment, Pensions and Retirement: If you are not sure if you are putting enough aside for retirement, or even if you think you are – is important to get all this reviewed.

Many people do not regularly check their “WealthPot” to see how it is faring – ie the money investments and scheme assets that they are hoping will provide enough for them to live a satisfactorily comfortable lifestyle when they exit from dependent paid work (running a business or employment!) and need a financially independent source of income. Most people call this point in time “retirement” but an increasingly significant number simply want to exit from dependent paid work as early as possible so they can get on with either a full life of leisure, increased time on vocational effort or even starting a new venture. 

Investors will frequently, if not casually, look at the length of time they wish to tie up their money as one option out of three: short – term ( up to 1 year or so), medium – term (5 years +) or long – term (ie at least 10 years) and then look at how much risk they are prepared to take based on these time based choices or together with their overall attitude to risk.

However it is also worth remembering one important time period – important for all of us – The Very Long Investment Term (most easily described as a continuously rolling 20 or 30 year interval).  This is the domain of investments set up for the seriously long haul – the “ocean voyage” in the sea of conflicting investment priorities.

At SewellBrydenGunn we have pioneered and continue to carve away at this approach to investment behaviour and the setting of relevant and appropriate priorities and benchmarks. In many ways the Very Long Investment (VLI) is probably the most important concept an investor may have to deal with and the strategies involved can very often appear to be at odds with conventional approaches. It could be described as the first and the last, the alpha and omega of investment concepts. Essentially it recognises the notion that investment is a COST of living, not a luxury, not something embarked by those with surplus, not something to be looked at later, and certainly not something set aside as an alternative to the deposit based “cash for the cautious”.  At its heart lies the belief that, right from before the start of a career, by making the LVI the FIRST priority COST above everything else, by nurturing a patient view to investment opportunities, by seeking taking and acting on appropriate professional investment & financial planning advice and by staying the course, it is possible for considerable relative wealth to be built up in this way over a working lifetime, which in turn leads to a better freedom of choice for the individual investor in the end.

So – if you are or want to be “in it for the long haul” but are not sure right now where you stand with regard to your “WealthPot” then perhaps NOW it is time to take stock of where you are and where you need to be – whether you need to check the hundreds, the thousands or the millions…..and when you have done that – do not forget about the needs of the people and causes who are dependent on you – after all: where would they be without you?  

Any queries – please do not hesitate to contact us.

Over The Past Week: Snapshot View of the Markets: Below are closing numbers as at Friday 11th October 2013.

For more discussion about how the financial markets may affect your own personal or business financial situation, protection, pensions or investments, why not get in touch?: 01276 471083 OR cedar@s-cm.com

Market Numbers

FTSE 100                              6487.19         0.52%    on the week

FTSE All Share                     3457.89        0.58%    on the week

Brent Crude $ per barrel       111.28         1.66%     on the week

Gold $ per troy ounce pmL  1265.50        -3.38%     on the week

Silver $ per troy ounce pmL     21.52        -0.60%     on the week

Copper US$ per tonne lme3  7156.00       -0.33%     on the week   (LME 3 months)

Wheat Futures CBOT            692.25          0.76%     on the week   (US$ per bushel – Contract 5000 bushels/136 tonnes)

Palm Oil US$ per tonne        835.00          0.91%   on the week   (eg CMEGlobex – trading unit 25 tonnes – mirror and settle to Malaysian ringgit benchmark)

MPC Base Rate  %               0.50  (Bank of England Base/Repo Rate) since 05/03/2009

Euro Repo Rate %                0.50  since 02/05/2013 (previously 0.75)

US Libor %                            0.10380   last week : 0.10130

Euro Libor %                         0.04571   last week : 0.04571

GBP Libor %                         0.46938  last week : 0.47125

Euro Euribor 3 mnths %     0.23   last week : 0.23

Sterling CDs 3 mnths %       0.48  last week : 0.52

RONIA  %                            0.4347  l wk : 0.4328 (Repurchase Overnight Index Ave Rate)

SONIA   %                            0.4283  l wk : 0.4315 (Sterling Overnight Index Ave Rate)

HFRX                                    1195.02           -0.50%  on the week  (Global Hedge Fund Index)

Tesco [}{]                               357.90            -1.00% on the week   xd

Sainsbury                               388.50           -0.33% on the week

BT  [}{]                                   348.10            -0.80% on the week

BP  [}{]                                   439.65             0.32% on the week

Rexam                                    478.00            -1.34% on the week

ARM Holdings  [}{]                £9.84             0.10% on the week

HSBC  [}{]                              689.60            1.82% on the week   

RBS  [}{]                                 376.90             0.99% on the week

RMG:LSE (330 launch)       455.00             37.88% on the week

Standard Life                         355.50             0.40% on the week   xd

WPP                                       £12.38              -1.28% on the week   xd

10 Year Government Bond (Gilt) Price     £95.71      Yield    2.75%

15 Year Gilt Yield Index. 15th of the month approx.  Yield    3.29%

One Pound will buy 1.5947 US Dollars

One Pound will buy 1.1758 Euros

CPI Inflation stands at 2.7% as at August 2013     Currently the old Gov’t measure of inflation

CPIH Inflation stands at 2.5% as at August 2013   Currently the new Gov’t inflation measure

Retail Prices Index (Carli):  3.3% – July 2013  No longer a Gov’t measure of inflation

Retail Price Inflation RPIJ – Jevon’s formula – NEW:  2.6% as at August 2013

Inflation Target expected to stay in place: 2.0%  based on the Consumer Prices Index (CPI)

The Chancellor confirmed in his Budget Speech Wednesday 20th March 2013 that the 2% Inflation target for the Bank of England would stay in place.

The Government’s Inflation Target is announced each year by the Chancellor of the Exchequer in the annual Budget statement. The Bank of England Monetary Policy Committee has as one of its aims, the aim to set interest rates so that over- or under- inflation can be brought back to Inflation Target over a reasonable time period without creating undue instability in the economy. Inflation Target is not a permanently fixed level and may vary depending on prevailing economic and fiscal conditions.

KEY to Important Indeces:

RONIA – Repurchase Overnight Index Average Rate – Launched June 2011

Changes to Method of Calculating Inflation Measurement Index – March 2013

pmL Metal and Precious Metal Pricing used in Market Numbers 

lme3  – London Metal Exchange 3 months

[}{]  –   Denotes a Stock or Share of a FT Global 500 company

xd    –   Denotes a Stock or Share price quoted as ex-dividend

Please ensure you read and take note of the disclaimers mentioned here.

Whilst every effort is made to ensure accuracy of the above information, this cannot be guaranteed and cannot be relied upon to be free from errors, omissions or inaccuracies.

This information update is provided for convenience and interest only and is not intended nor does it constitute any form of regulated or other advice and no liability is accepted, nor does any information provided here constitute nor is it intended to be any form of invitation or solicitation or recommendation to buy sell or hold in any capacity and no liability is accepted. You should not use this update as a basis for making decisions.

SewellBrydenGunn (business name and trading style of SCM Finance) and or any of its members employees partners proprietorship or other stakeholders (we) from time to time may or may not have an interest in any items contracts stocks shares securities or other instruments mentioned here. For your own safety and convenience you should always assume that we may have an interest or position in any of the above and consequently you cannot rely on it to be impartial information.

You should confirm independently any information you wish to rely on to make any decisions – in any case you should seek and take appropriate and timely independent financial legal or other advice including full and proper discussions about the level of financial legal or other risk involved before deciding on any action transaction or inaction.

Past performance is not an indicator of future performance. The value of investments and any income from them can go down as well as up and you may get back less than originally invested.

“Secure” “investments” such as Cash on deposit, can provide relative safety to the amount invested or held in this way and can be expected to offer relatively low growth over the medium to long term. They cannot fall in actual value, but can fall in “real” value due to the effects of inflation.

At the other end of the risk scale, “Adventurous” investments (more volatile Equities – Stocks and Shares) carry a relatively much higher risk of capital loss but with the potential for relatively much higher capital growth over the medium to long term. They may be subject to a considerable level of fluctuation in capital value. They do not offer any guarantees.

At the extreme end of the risk scale – Aggressive/Specialist/Highly Speculative – are investments such as leveraged contracts, derivatives, options and futures. Directly investing into these investments carries a very high risk of capital loss, but with the potential for a higher return (or severe loss) over the short the medium and or the long term. They are very volatile and are only suitable for investors who can afford to, and are prepared to, risk the entire capital value and for some investment contracts, risk substantially more than the original capital value, as well as being prepared to take a very active role in managing their investment throughout the day, every day. These types of investment are definitely NOT suitable for the majority of investors since most investors are “passive” once they have made their initial investment – ie they expect to review their investments from time to time but without being actively involved on a daily basis. These investments do not offer any guarantees.

Photo Credit: SBG PhotoStock

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