A Message From Matt – 11th December 2020

So how is it that we have already arrived at the end of 2020?

I think this year has been the ‘fastest, slowest’ year I have ever experienced. In some senses 2020 really seems to have dragged on. It seems forever since I saw my family or friends properly and I am sure we are all looking forward to hopefully getting back to this kind of thing as we move into the Spring next year and beyond!

In other ways, 2020 has flown by.

I know we say it every year, but the last 12 months seem to have gone by in the blink of an eye. Perhaps it is the fact that much of this year has felt like a bit of a groundhog day? The big ticket events that punctuate our years and photo albums (birthday celebrations, weddings, overseas holidays) have largely been absent and so the months have seemed to blur into one a little bit.

I think it is fair to say that 2020 will not go down as one of most people’s favourite years, but, being the eternal optimist, I do like to look at the positive in all of this.

First of all, we have learned a lot, both individually and collectively. The ingenuity of the human race never ceases to amaze me and 2020 is testament to the power of our collective minds. Not only have we developed and rolled out the vaccine in record time, we have also celebrated several other scientific and technological achievements which have pushed us forward, despite the challenges of the pandemic.

Although crisis sometimes brings out the worst in us, it can also bring out the best of us. I am sure we have all seen acts of incredible kindness and selflessness in 2020 – let’s hope we can carry some of that sentiment forward with us.

Finally, on a more local level, I could not be more pleased with how we have adapted and thrived as a business and as a team during the past 12 months. Have there been challenges and failures and frustrations – of course there have, but I feel that we have far more to celebrate than commiserate as a team this year.

This will be my last blog post of 2020 as I am taking an extended Christmas break, having taken relatively little holiday all year to help guide the business through what has been the most tumultuous of years.

I would like to close by thanking each and every one of you, our clients, from the bottom of my heart. I am always grateful for every client that chooses to join us on this journey, but I cannot express how incredible it has been to have your support during this year above all others.

You are the reason that I get to do what I love each and every day and I am not sure that many people get to say that in this world.

Wishing you all a very merry festive season and a happy, healthy and prosperous 2021!

Yours sincerely,
Matt Smith, Director, Buckingham Gate Chartered Financial Planners

A Message From Matt – 27th November 2020

I have mixed emotions as we approach December. On the one hand, as I mentioned during our client event last week, I feel that there is a lot to be optimistic about as we head into 2021. On the other hand though, it does feel like we have a fair few hurdles to jump over before we get there. Before we look at those though, let’s focus on the positive…
 
First of all, we have not one, not two, but now three viable vaccine candidates in the pipeline and although none of them has thus far received regulatory approval, it seems almost inevitable that at least one or two of them will in due course.
 
The arrival of the vaccine hopefully signals the beginning of the end of the pandemic which has caused so much pain and disruption on both a financial and emotional level. 
 
Furthermore, we now have a clear result in the US election and hopefully we will see an outcome (not necessarily a deal, but an outcome – I have always maintained that certainty, even bad certainty, is better than uncertainty) of the Brexit process before the year is out. 
 
All of the above has removed a lot of uncertainty from the world, hopefully creating a more stable foundation for us as individuals and for stock markets as we head towards the new year.
 
So far so good. But it is not all sunshine and rainbows.

First of all, although the vaccine seems to be on the way now, it is clearly going to take some time for the rollout. In a way this makes things harder to bear as rather than waiting for an unknown, we now know we have the vaccine, and it is ‘out there’ and so we are simply waiting for it to arrive. Knowing something exists, but not being able to benefit from it yet, I personally find quite frustrating – perhaps it is just the entrepreneur in me wanting to make things move faster!
 
Then, we had the announcement yesterday of the new tier system. On the basis that the vast majority of us seem to have ended up in tier 2 or 3, it feels to me very much like we are heading out of lockdown on the 2nd December and going straight into …… wait for it …..lockdown.
 
Finally, we have the issues surrounding Christmas. Christmas is an incredibly important time of the year for me for all sorts of reasons, not least because of the chance to see extended family and friends. It will come as no surprise to those who know me that I was disappointed to learn that we can only have 3 households in our bubble over the festive season. Although this was not at all unexpected, it is nonetheless disappointing.
 
Please don’t get me wrong, I understand the reasons behind the decisions and of course I wish to protect my vulnerable family members as much as the next person, but it is still a disappointment for me not to have the usual mass meet up over the holidays.
 
So, perhaps rather unusually, it seems to me as if the longer term is somewhat clearer and easier to predict, with more uncertainty existing in the shorter term.
 
-In the longer term we now know with a fair degree of certainty:
-That we will have a vaccine
-That we can begin to return to some normality at some point
-That we can hope to return to our offices and workplaces at some point
-That we have a more stable political environment moving into 2021
-That the economy can hopefully recover
 
I think if I could summarise the final quarter of 2020, it would be that we have moved from wondering ‘IF’ things will happen and it is now just a matter of ‘WHEN’.
 
However, in the short term we have to deal with:
 
-What tier is my area in now and where will we be in the coming weeks?
-How on earth am I going to negotiate the social minefield of picking just 2 other households to spend the festive season with?
-What will the Brexit deal look like?
-When will the vaccine deployment begin?
-Will we actually have ‘significant normality’ by Easter, having already been promised ‘significant normality’ by the government on at least 2 or 3 previous occasions that have now come and gone.
 
So … an interesting dichotomy and a feeling that I am not sure I have experienced before where the medium / longer-term looks very clear in my mind, whereas the next 3 months are very hazy indeed!
 
Unfortunately, I don’t have the answers to any of this uncertainty, but I do know that it will pass, and probably faster than we imagine. Just remember that the darkest hour is before the dawn and this too shall pass!

Yours sincerely,
Matt Smith, Director

Turbulent Times – 6th November 2020

Well, it certainly has been a tumultuous few weeks.

Lockdown part II seems to have coincided with a fairly inconclusive US election result, which at the time of writing, looks as if it could remain that way for many days or even weeks at this stage. Throw in a relative lack of news over the progress (or not) being made with the Brexit trade deal and we have a recipe for an interesting winter.

None of these things were totally unexpected, in fact you could argue that all of them were fairly likely, however that still doesn’t make the uncertainty any easier to deal with.

As always, we like to look for the positives in all of this.

First of all, although we are now in a second lockdown, it is far less restrictive than the first. Parents across the land will be breathing a sigh of relief at the fact that the schools are remaining open. We can at least have a tiny bit of outdoor contact with others outside of our immediate family and we are not restricted to just a single dose of daily exercise (quite what the logic of that rule was the first time around I will never know!).

As far as the US election is concerned, I think we can take some comfort from a financial planning perspective from whichever outcome we receive. A Trump victory would arguably be the stock markets favoured outcome. He would likely maintain the status quo in terms of low corporate taxes and reasonably low levels of regulation. If Biden prevails on the other hand, although he might introduce some policies which would create a short-term market shock, he is perhaps the more moderate candidate and might be more willing to negotiate and cooperate with other countries around the world which would do geopolitics a world of good.

Finally, we have Brexit. Although the news on this front has been rather quiet of late (it’s amazing to think just how much Covid-19 has stolen the show in terms of media airtime), there are some glimmers of hope that we might reach a deal. My own view is that they will be able to pull something out of the bag at the eleventh hour, it just depends what that ‘something’ is.

It just goes to show that most clouds do have a silver lining.

Enjoy your lockdown the best you can – it will be over before we know it (I hope!)

A Message From Matt – 19th October 2020

So I caught it. The invisible and deadly virus that I have been terrified of for the past 6 months. Despite us not really seeing anyone for the first three months of lockdown, despite all the hand washing and alcohol gel, despite the face masks and social distancing, I still managed somehow to pick up the virus.

We don’t really know where it came from and in truth we never will. That is perhaps one of the most frustrating facts about this virus.

So, what lessons have I learned over the past 2 weeks?

1 – This virus can find you, no matter how careful you are. For me, this underlines the importance of everyone ‘doing their bit’ to keep others safe.

2 – My personal experience of the virus was not too bad at all. I was fortunate to be one of the mild cases. I first had a mild temperature a week ago on Sunday and ordered the obligatory test, which to my surprise came back positive.

Following the positive result, I was a little tired and achy for a couple of days and then I lost my voice for a day or two. After this, I felt generally ok (not perfect, but ok) for around a week and then I lost my sense of smell for a couple of days. It just vanished all of a sudden which is rather disconcerting I must admit. After that, I have been fine and I am pleased to report that I feel as if I have completely recovered, having got back to my exercise regime three days ago.

3 – Despite my case being very mild, the sheer ‘catchability’ of the virus does make me worry for some of my frailer family and friends (see point 1 above).

I suppose actually having the virus has put things into perspective for me and this experience has, once again, reinforced the fact that the media reports on the extremes of things.

When I went to book my test, I expected the whole experience to be a nightmare given media reports of 3 / 4 day wait times and 300-mile drives! My experience was anything but.

I ordered my test at 4:30pm on Sunday afternoon, had it in a drive-in test centre 15 minutes away from my house at 6pm that same evening and then the results followed only 24 hours later – pretty much a flawless service in my view.

Now, I am not saying that no one is having issues with testing, but it does go to show that the media rarely report on the positive. I haven’t seen a single media report where they interview someone about testing and they just say “yes – my experience was very speedy and efficient thank you very much” – it just doesn’t make good news.

They also rarely seem to interview the thousands of people who have had a mild version of the illness. “Well I was a little under the weather for a day or two and then I felt fine” doesn’t make particularly compelling watching I suppose.

But, this does underline the need for perspective when thinking about the virus as with all areas of life. The media will tend to report at the extreme ends of any spectrum, but this hides all of the people in the middle, which will tend to make up the majority.

Now, please don’t get me wrong. For some people, the virus is devastating. It has had a huge impact on many of the client families that we work with and we have lost a relative close to home as well.

But, having now ‘been through it’, I have a healthy respect for the virus, but it’s fair to say I have a more balanced and unbiased view. There is nothing worse than the fear of the unknown and that is the problem with our current fight. Unlike with other crises, we can’t see the enemy, we don’t know what impact it will have on us if we are one of the unlucky ones.

All I wish is that you keep well and keep safe through winter as we head back into a lockdown of sorts and I look forward to ‘seeing’ you at our 2020 Client Event which of course will be held virtually this year.

Getting Ready For Round 2

It was almost inevitable, but we are now dealing with ‘lockdown’ round 2. Just as things were beginning to return to some vague kind of normality, the virus has staged its resurgence and more restrictive measures are being introduced.

The timing of Boris’s announcement was almost comical for the Buckingham Gate team – our builders signed off the first phase of our office building project on Tuesday morning and ‘handed back’ the office to us and then the ‘work from home’ message came on Tuesday evening.

I would like to reassure clients that our commitment to getting back to the office (and to face-to-face meetings for those who want them) is unwavering. We have spent considerable time, money and effort re-designing the Buckingham Gate office and client experience and we can’t wait to show you the fruits of our labour – we will just have to wait a little longer until the government guidance and health crisis allows.

We have started doing a small number of home visits with clients where this is necessary (the signing and witnessing of wills and trusts for example) and will continue to offer this service, with all the gloves, masks and other mitigation’s in place, for as long as we are permitted to do so.

As we enter the colder, darker months I think this is the point where the economic pain might start to become more visible. Up until now, although both people and businesses have undoubtedly been struggling, there has been a very significant element of government support with the furlough scheme, grants, loans and handouts galore.

All of that is about to change. While the announcements from Rishi Sunak last week will be welcome, the schemes being introduced to take us through the winter are nowhere near as generous as the ones that they are replacing.

The Furlough scheme paid up to 80% of a workers whole wage, the new scheme will pay only around 20%. The same is true for the self-employed scheme, with the grant available now only £1,500 for a 3-month period – Just £500 a month to survive on!

The sectors most impacted by the new restrictions (hospitality, travel etc) make up a reasonably small portion of the stock market in relative terms, but they do account for a large percentage of the workforce. As such, I think any impact on markets will be due more to waning consumer confidence, rather than down to the fortunes of the companies themselves.

The companies that have accounted for much of the stock market growth and recovery we have seen this year (mainly the large technology giants) will most likely continue to perform well in this environment as our demand for their devices and subscriptions grows ever larger.

We will, of course, be monitoring developments carefully, not just with Covid-19, but also with the Brexit process and the US Elections (two events that would nearly account for all of the headlines in any normal year, but that we are hearing relatively little about vs Covid).

Most importantly, I want to reassure clients that we are here for you. Our mission is to create financial peace of mind for each and every one of you and if there is anything more we can do to help you achieve that, even in these most unusual of times, please don’t hesitate to ask.

A Message From Matt – 2nd September 2020

As we enter September, it strikes me that we are now 2/3rd’s of the way through the year and about to enter the final 4 months of what has been a rather tumultuous 2020 to say the least.

In some ways 2020 feels like a lost year. Many of the key events that punctuate our photo albums and memories (holidays, weddings, birthday celebrations etc) will have been cancelled or postponed and in some respects it feels like we are waiting to get back to doing these things that we love.

My planned family trip to Florida in April was of course called off and I am still disappointed by this, especially as this would have been our first major overseas trip since my daughter Amy was born and my first trip to the States in some time.

In other ways however, 2020 will be marked as the year that changed everything. Our way of working, our way of relaxing, our way of life is being re-written as we speak and the longer that the now rather strange dynamic of not being in lockdown (but still somehow feeling as if we are) continues, the more permanent these things will become.

What is for sure is that we are very excited about getting back to the office as a team and we are also very much looking forward to welcoming clients in for face-to-face meetings (for those who are ready and comfortable to do so – Zoom meetings will remain on the menu for those who are not yet ready or for whom it is simply more convenient).

Although the narrative at the beginning of lockdown was around the ‘death of the office’, as time has gone on, I think businesses are taking a more balanced view and are starting to see the benefits of teams being together in one place and collaborating. Although we will not be insisting that the team is in the office all of the time, we are all looking forward to being there together some of the time.

During lockdown, we have been putting a great deal of effort into redesigning and improving our on-going financial planning service to clients, the highlight of which is the annual forward planning meeting. We are excited to show you what we have been working on and will launch this new and improved review service as we open our brand new office on Northumberland Avenue to clients for the first time (which we are hoping will be in early October – case numbers and Government Advice permitting).

We are incredibly grateful for the fantastic ongoing client relationships we have and will never forget the kind words of support and encouragement we have received throughout lockdown.

If there is anything more you think we could be doing for you, or if you can think of anything else you would like included in your ongoing financial planning service, do be sure to let us know – we would love to hear your ideas.

A Message From Matt – 29th June 2020

As it becomes clear that Coronavirus is not going away any time soon, we move from the initial panic phase of the crisis into the management and maintenance phase.

If we accept that the Coronavirus pandemic is going to be a marathon and not a sprint, you could use the analogy that we have started a little too fast, running the first 5 miles in record time, but that might come back to bite us later as we struggle to settle into a more consistent pace for the rest of what is still a very long race ahead.

It feels to me as if, in general (notable exceptions being New Zealand and Germany for example), governments were a little too late to lockdown and we have exited lockdown a little too early. Katherine and I were shouting at the news for Boris to lockdown around a week earlier than he actually did, and we also feel that the ‘unlocking’ is coming a bit too early as well.

Others will disagree and if anything is for certain at the moment, it is that Covid-19, just like Brexit before it, is proving to be a divisive issue with people’s opinions largely informed by how the crisis impacts them and their family.

Although this is a vast over-simplification, I would summarise the position as follows:

The more severe the economic pain people are going through, the less they seem concerned with the health implications of the crisis.

The more severe the health impact that people have suffered, the less they seem concerned with the economic implications of the crisis.

Of course, these issues are never binary and there will be a variety of different views on the matter. The other issue is that we will only know which view was ‘right’ (if there is such a thing in this kind of situation) with the benefit of hindsight. I certainly know that I don’t envy the impossible decisions the government is having to make at the moment.

What I would say that we could all do with is a little more understanding. No matter what angle you view the pandemic from, it has touched all of us in some way and caused some form of pain or suffering – sometimes severe, sometimes moderate.

Whatever your view though, I think it is important to remember that other people may have been impacted in different ways.

In my personal little family bubble, we have definitely been more focused on the health implications of the crisis, to the point where we have barely left the house in 3 months. Other members of my wider family are suffering financially and therefore can’t wait for the economy to re-open.

Regardless of your perspective, the one thing that binds us all together is that we are in this together. We have already seen the capacity for human kindness and generosity during this pandemic and hopefully this will continue as we enter what could well be an extended period of ‘tough times’ for certain people.

Above all – stay safe, stay sane and enjoy the sunshine!

 

 

Comfort Reading For Uncomfortable Times

We are currently living through some interesting and unprecedented times and it can be difficult to gain perspective when we are in the middle of a crisis.

We have curated some articles and resources below that should allow for a more rational view of current events and this content will hopefully provide some reassurance for those of us who are struggling with the daily news feed at the moment.

Curated Resources

1. S&P 500 Crash Recovery Timings

This document shows the performance of the S&P 500 since 1926 and, most importantly, the relative length of ‘bull’ (positive) and ‘bear’ (negative) markets. The good news is that bull markets tend to last much longer and generate much greater returns when compared to the relatively short-lived bear markets. To support this, you can also download our very own ‘How The Market Works’ document here.

2. FTSE All Share Crash Recovery Timings

The theme here is the same as above. The key thing to note here is the shaded areas, which show the times of crisis or recession. Note how the stock market recovery often starts while the crisis is in full swing. For example, the 2nd World War lasted from 1939 to 1945, but the stock market recovery began in the middle of 1940 – almost 5 years before the end of the war. This same pattern can also be observed during the financial crisis in 2008/09.

3. Fidelity document on missing the best days in the market.

We have shared this document many times before, but the message holds true. If you miss the best few days in the market, even over a long period, you significantly damage your total returns. If we look back 15 years from now, it’s not hard to imagine many of the best days being in 2020 given the volatility of the market.

In fact, yesterday (24th March 2020) is now on record as the 2nd best day in the history of the FTSE 100. This just goes to show that the best days often come on the back of the worst.

Curated Articles

We have summarised some of the best new (and old) articles about investing in times of crisis.

Stock Market performance in previous outbreaks

50 Previous ‘Crash’ Events that the market has ignored

We Will Get Through This

The Market Always Goes Up

Recommended Reading

If you are looking for something more substantial to fill a day at home, we would strongly recommend the following book:

Factfulness – By Hans Rosling

We have suggested this before, but this has to be our number one recommendation for those wanting to gain perspective on seemingly extreme events and the way that the media report on them. An essential read for every human being on the planet.

The Financial Conduct Authority does not regulate Estate Planning, Tax Planning, Will Writing, Trust Advice, or some elements of Automatic Enrolment.
This communication is for general information only and is not intended to be individual advice. It represents our understanding of Law and HM Revenue & Customs’ practice. You are recommended to seek competent professional advice before taking any action.

Please note that investments can fall as well as rise and any income generated by an investment can fluctuate over time.

Coronavirus – how we are dealing with things

Like many companies across the UK, we are heeding the governments advice and implementing various changes to the way we do business with immediate effect and until further notice.

We are doing everything we can to maintain our usual service to clients and to that end we are implementing many of our well rehearsed business continuity procedures.

Video Meetings
In line with government advice, we will be conducting the majority of client meetings via video call or telephone where possible and minimising face-to-face contact.
If you have a face-to-face meeting booked at the current time, we will be in touch very soon to make alternative arrangements.

Home Working
As of 5pm Tuesday 17th March, we have taken the difficult but necessary decision to close the office and all staff will now be working from home.
We have robust home working policies and procedures in place and all staff have remote access to our telephone system and software packages.
Therefore all of your inquiries will be handled in the usual manner.

Post
Post will be collected less frequently than usual from the office so where at all possible we would encourage clients to communicate with us via email or telephone.

Documents
Along the same vein, we will be minimising our use of paper during this time and will send all communications using digital means where possible.

Protecting our Quality of Service
We appreciate that this is a concerning time for everyone and it seems clear that the impact of the Coronavirus will be felt for many months to come. During this time we will be doing all in our power to support, reassure and advise our clients and their families. We will be using this time as an opportunity to improve and expand on the service that we provide to clients and we will continue to keep you updated on any further developments.

Coronavirus Update – 13th March 2020

It is refreshing to open an update with at least a paragraph or two not on Coronavirus (but more on that in a moment). We are pleased to report that we have completed our analysis of the Spring 2020 Budget document and the impact on personal financial planning is incredibly minimal. Except for some increases to National Insurance thresholds and some tweaks to fringe tax benefits such as Entrepreneurs Relief, there is little in the budget that will have any effect on current planning.

Perhaps if there is one good thing to come from the present situation, it is that we have yet another fairly benign budget from a personal financial planning point of view and this means that the current fairly generous personal tax regime will be maintained.

Back to the virus now and it is fair to say that the market is searching for direction. Headlines from yesterday reported some of the worst stock market falls since 1987. It is interesting to observe that at the time of writing this (which I will quote as 12:28pm on Friday 13th March given the minute-by-minute changes we are seeing) the FTSE 100 is up around 8.7%, effectively re-gaining much of yesterday’s loss.

Assuming it closes at this level (and there is a whole 4 hours for things to change before then!), don’t be surprised if this barely gets a mention in the media, despite the huge reports on falls of a similar magnitude yesterday. This only goes to show just how volatile things are at the moment and how rash decisions can have an impact on your wealth over the long term. The current volatility is almost entirely driven by emotion and not logic. There is almost no conceivable way that the long-term intrinsic value (over the next 30 years) of all of the worlds great companies (think Apple, Unilever, HSBC, General Motors etc) fell by 10% yesterday only to grow by 10% today!

Having consulted with our partners at Square Mile again, the view is now that most markets are starting to offer very good value and there are some real opportunities to purchase the worlds great companies at a significant discount versus where we were just 3 short weeks ago.