We have unfortunately been dealing with a number of probate cases recently and it strikes me just how different the families’ experience can be, depending on how organised the deceased had been with their financial affairs and paperwork prior to their passing.

In some cases, people have been very conscious of the ‘mess’ that will be left behind when they pass and have made a concerted effort to simplify and consolidate their affairs. The ideal scenario here is that all of the cash banking is with a single organisation (or, if multiple savings accounts are required, then these are handled through a cash aggregation platform) and all of the investments are held on a single platform – simple!

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Things seem to be looking up on the market front.

Despite the talk of recession, cost of living crisis, inflation still dominating the headlines, as is often the case the corporate world seems to be ignoring all of this and posting, on the whole, some pretty impressive results.

Many of the large US corporations are currently reporting results and in many cases they are defying expectations.

Amazon for example posted some fairly impressive numbers yesterday which sent the share price up 7% or so in after hours trading, also lifting the shares of many other US technology companies in the process.

These are the kinds of ‘victories’ that tend not to make the front pages, however these kinds of stories seem to be fairly common right now as we see some impressive numbers posted by various companies across various market sectors.

Now of course, not every set of results is going to look so rosey, but let’s take the wins where we can.

I think that maybe … just maybe … we are starting to see some light at the end of the economic tunnel!

This year’s budget was always likely to contain relatively few major personal finance announcements given that we had a major package of personal tax measures announced in the autumn. This Conservative government does however like to pull the occasional rabbit out of the hat, and they did that in a significant way at this budget.

The only measures of significant note from a financial planning point of view will be those on pensions and childcare – we will focus on the pensions side of things here.

The last time we had a pensions rabbit out of the hat on this scale in a budget was probably the previous pension reforms in 2016.

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I have been saying this for a while now, but I do feel that we have just entered a new chapter in the economic history books.

Us humans like to put things into groups and categories, we like things that can neatly fit onto a graph or chart.

Well… if the 2008 to 2021 period was one chapter, I think the start of 2023 firmly marks a new one (2022 was the transition year, the page turn if you will between one chapter and another).

In order to understand how these two economic phases might differ, let’s look at some of the key characteristics of the 2008 – 2021 era:

The world suffered from one of the worst financial crises in living memory – you would have to go back to the Great Depression in the mid 30’s to find anything similar in terms of size, scale or impact.

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I can’t imagine that there will be too many investors who are going to put 2022 into their ‘favourite years’ scrapbook. The 31st of December 2021 pretty much marked a relative high point for most major markets and they have struggled to varying degrees as 2022 has unfolded.

It is quite remarkable to think just how many ‘black swan’ events we have had in the past few years and 2022 has certainly added fuel to the fire in that respect.

The year opened with increasing fears about inflation and rising interest rates – a theme which has persisted throughout this year.

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The announcements made yesterday by our fourth Chancellor in 5 months, Jeremy Hunt, will have come as little surprise to most. In a clear attempt to do the precise opposite of the ‘shock and awe’ tactics of the Liz Truss / Kwasi Kwarteng Government, most of the content of yesterday’s announcement had been rumoured or leaked to the press already.

First to the good news, if we can find any in there…

Well. The markets didn’t hate the announcements. Again, most of them were known beforehand and would have already been priced in – the FTSE 100 barely moved yesterday ending the day down just 4 or so points.

In addition, Jeremy Hunt renewed the Government’s commitment to tax-efficient (and growth-promoting) investments such as VCTs (Venture Capital Trusts) and EIS (Enterprise Investment Schemes). There had been some small rumours that these might have been on the chopping block so it is encouraging to see these additional tax-efficient vehicles retained.

Finally, there was nothing much was changed in terms of the actual structure of the tax system. The core way that tax operates and the rules and legislation surrounding it were broadly kept the same.

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I was not scheduled to write a new blog post today, but given yesterday’s monumental market events, I thought it would be a good idea to pen a brief note.

So often, I talk about the risk of missing the “best days” in the markets.

What I am referring to here is that missing out on just the best 5 or 10 days in the market within a multi-decade time period can have a huge impact on your overall investment returns (or losses as the case may be).

I have shared this document before, however if you would like an explanation of just how powerful this concept is, please click the button below to see a wonderful page by Fidelity:

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You will have to excuse the somewhat more technical nature of today’s post, however, we seem to be at a bit of an inflection point in markets with a huge volume of change going on all at once.

During times like these, our ‘inner chimp’ has the capacity to take over and override our more rational human brains. Our ‘inner chimp’ refers to the emotional and instinctive reactions we have to things every day – the weather, an interaction with another person, the news headlines or the stock market for example.

During times like these, the media will do all that it can to grab the attention of our inner chimp. They will use scary headlines to describe what might otherwise be fairly mundane events to capture our imagination and get us clicking and reading their stories.

It is fairly common to see headlines such as:

“Stock markets in freefall”

“Carnage in bond markets”

“The death of the 60/40 portfolio” (I will come back to this in a moment)

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