After many months of markets rising relentlessly the past month has reminded us all that this is not the normal way of life. We noticed an immediate increase in activity on our web portal, with clients anxious to see how much damage had been done to their wealth. Given our human tendency to over-react to adversity, this is a completely understandable reaction. Indeed, it’s one of the reasons why we provide access to daily valuations. But this is also an opportunity to think about whether these fluctuations will really make much difference to your standard of living.
Most of us do not have the security of a final salary pension that will comfortably provide for our future needs. Even if we did we might have been tempted to take advantage of the record high transfer values recently on offer. So, this means that we will need to convert our capital into income at some point and the key question will be: how much can I spend?
This is tricky, some technical experts reckon it’s the most difficult problem of all in financial planning. That’s why we’ve been investing heavily in being able to provide you with the type of information that will help you decide if you are on track with your plan, or not.
There is no black or white answer – reality is too complex for that. But we think we can give you a sense of whether your plans are realistic. And also where the big risks lie.
The good news is that short term variations in the value of the portfolio make surprisingly little difference. So don’t get too flustered by the market gyrations that lie ahead. With the Brexit talks getting into the final stages we can expect a host of alarmist messages but the chances are that in a few years’ time we won’t remember any of them. And that’s not just down to future memory loss!