To say the last 6 weeks or so have been challenging, would be an understatement. Many of us are working from home which may mean that we are away from our family, friends or partners and the stress of being unable to find flour anywhere leaves you short on fulfilling your seemingly national obligation to bake banana bread.
Many of us have seen not only a stark change to our working structure but our bank balances have seen less expenditure on most things with exception of online shopping. Short of telling you must do this, you must do that, I have put together a short piece of what you may find useful to think about if you have the time in between your Soviet-esque daily exercise allowance or binge watching Tiger King/Too Hot to Handle/Friends (delete as appropriate.)
- Markets have been reacting almost every day which can lead many to believe now is a bad time to invest as human nature tends to feel drops in value more so than any increases. Now, however, is not the time to stop investing, as it may well prove more beneficial to keep investing now than when markets are doing well.
- By selling investments when the value falls, locks in the fall in value rather than being patient and allowing the value to increase once again over time.
- Although it is not exciting, ensuring that you keep paying premiums on insurance policies provides that stability for now and for when normality returns. During the 2008 crash, many sacrificed protection cover leaving themselves vulnerable moving forwards. One issue here is when they then reapply in the future, premiums will be more expensive due to being older and potentially have further health issues.
- The property market has taken more impact than most other aspects of life and that is obviously quite something. Whether property prices take a hit remains to be seen as very few property sales are currently completing due to the inability for surveys and values to be carried out. Having said that, we are seeing some purchases go through where the property in question is vacant and the purchase chain is relatively short and the Loan To Value is below 75%. Remortgages are in slightly better stead but still limited in some instances.
- Recent statistics shows that over 1.6 million mortgage holidays have been approved. The way this works is that the 3 months of mortgage payments that you would have paid now are added to the back end of the loan term meaning it isn’t “just don’t pay your mortgage payment for 3 months”.
Rainy Day fund:
- Times like these, prove that if it is possible and I do appreciate it is hard, the safety net of having a rainy day fund is invaluable. The ideal amount is 3 months essential funding but the first step towards this would be to grasp what you spend and on what so you know where you are starting from and can build from there.
- No one has a crystal ball to see what will do well over time but one area that is increasingly popular is ESG which stands for Ethical, Social and Governance.
- Historically, such investing was interpreted and applied narrowly by specifically excluding certain problem’ stocks such as tobacco companies and armament manufacturers. Over time ESG investing has evolved towards so called ‘positive investing’ – investing in companies with positive social, environmental and governance attributes and actively engaging with companies to improve their policies and practices. The ESG funds we use must also demonstrate that a focus for responsible investing is embedded in their philosophy and process.
- There are early suggestions that ESG investments have performed better than non-ESG funds through this volatile period. Not only is the fall in value in oil avoided but through extensive screening that takes place and the ethos behind the companies themselves, the fund is often best in its’ class.
Not only do Panoramic have the capabilities of offering ESG investments, we can take clients on who invest as little as £100 per month. This negates an issue which sees many shy away from advice as they have been told they do not have enough money. If that, or any of the above is of interest please do let me know your thoughts and as always, am happy to talk to you or any others that would be interested.