Spring 2019 Newsletter

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Ringing in the changes in more ways than one

With the countdown to Brexit now in days and still no clear idea of the terms under which the UK will be leaving the EU, you’d be forgiven for clinging on to whatever certainty you can find.

It’s unusual to be thankful for the tax year change, but it is one of the few anchors in the current turmoil. While the country may not be able to clearly see the path ahead, there is route from 6 April for new rates and allowances to allow you to plan your personal finances. Philip Hammond’s change from Spring to Autumn Budgets, though initially disconcerting, has the advantage of providing more time for implications to percolate and to dovetail with final year end planning.

These ‘known knowns’, to borrow former US Defense Secretary Donald Rumsfeld’s infamous phrase, can at least serve as anchors over the coming months. What flows into the realm of ‘known unknowns’ is how markets will react and the effect on personal investments. In the Spring edition of our newsletter, we look at the behavioural biases you may bring to bear on your investment decisions.

It may feel obvious that markets, and by extension, individuals do not behave entirely rationally. Self-awareness of our own irrationality, however, is often harder to define. As we head into potentially even greater turbulence across investment and currency markets in the coming months, an understanding of what may be driving your reactions, and decisions, can provide a useful lens through which to review your current portfolio and look at new opportunities.

We raise two other ‘known unknowns’. First, the probability of living longer, potentially to 100 or more. ONS data shows increasing numbers reaching 90 and beyond, and your long term financial and retirement planning needs to take this reality into account. Before you get there, however, you may encounter difficult times either through illness or job loss. In that case, taking measures to protect your income and lifestyle from a potential downturn could be a sensible option.

Our next update will come in the Summer, when we should at least be clearer on known, and the currently unknown. We look forward to discussing the implications with you then.

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