Checklist for a Crisis

I do hope that everyone is managing to stay virus free and that you are not going stir crazy just yet. Things must be getting desperate at our house because we having a raclette tomorrow evening, something I never thought we would do again, after the last time in about 1972!

On a more serious note, the daily numbers of deaths from coronavirus are very disturbing, particularly of course as each death represents a personal tragedy for the families involved. However, the numbers from Italy and Spain are starting to look more encouraging and the longer this improvement continues, the nearer we come to a release from the lockdown. In the hope of saving many more lives, I am sure we can all endure the relatively minor inconvenience (for most) of staying at home for a few more weeks. We will all be able to emerge from our houses and meet up with family and friends soon enough.

The following is something I received yesterday from The Chartered Institute of Securities and Investments (CISI), it is a sort of checklist for people who might be struggling to deal with basic money worries during this crisis. I don’t expect this to be of direct relevance to most my clients but you might know someone who could find it useful, it’s mostly common sense but it can be hard sometimes to see the obvious when one is enveloped in a cloud of uncertainty. Please do feel free to share with anyone you think it might help.   

“Financial Planning is here to help you

By Jacqueline Lockie CFP™ FCSI, Head of financial planning, CISI – 8th April 2020

In the UK the Office of National Statistics (ONS) has released its first weekly ‘rapid’ statistics data during the Coronavirus pandemic.

The initial results from the new Business Impact of Covid-19 Survey show:

• 73% of households in Great Britain, whose household head is an employee, had enough financial assets to cover a 25% fall in household employment income for a period of 3 months

• 54% were able to cover a 75% fall for 3 months

• 76% of self-employed households had enough financial assets to cover a 25% fall in their household employment income, and 61% could cover a 75% fal for 3 months

The ONS found that older households were most likely to be able to have enough savings to cover a fall in their household employment income for this period of time.  After that the picture changes significantly.

This guide aims to help you think about your finances by highlighting the important factors that our community of leading and highly qualified experts from all over the UK - CERTIFIED FINANCIAL PLANNERS and Accredited Financial Planning Firms – think you should look at during this uncertain and challenging time. 

Solve the task at hand now - Cash management for individuals and families

Many people have seen a cut in their income each month.  Some of you may have been made redundant and might now be claiming benefits.  Other families are bracing themselves for more severe reductions in their income in the coming months. Here are our top tips for looking at the cash you immediately have available if you have a sudden loss in income:

1. Prepare a clear budget for food and other essential bills:

Write down everything you buy and review objectively.  Can you cook more and save on more expensive processed meals?  Do a daily food menu and only buy what you need to save wasting food. Write down all your other bills and when they are due.  Cut back now on all non-essentials.  Research online what state assistance or charity help you might be eligible to receive and apply.  Avoid taking on significant loans with high interest rates. Talk to your mortgage lender and bank about what they might be able to do to help you in the short turn.  Check with your local authority if you can spread your council tax over 12 months rather than 10, cancel any travel tickets not now being used and sell unwanted items in your home such as old consoles and mobile phones that might be hidden away in drawers.

2. Stop all unwanted or forgotten direct debits and standing orders from your accounts. 

Review your credit card statements and bank statements to ensure you are not paying out on unnecessary or forgotten regular payments. Please be careful what you are cancelling and make sure you understand the implications – money being spent on insurance as they might be the fall back items you might need longer term.

3. Be aware of scams:

Many people are worried about their futures at the moment.  This anxiety in the global population can be an opportunity for scammers to pounce.  When you are rushing to secure your own financial situation, you might be more susceptible to falling victim of a scam.  Follow simple rules: do not answer texts or calls asking for bank details unless you are expecting the contact.  If in doubt use the number on the back of your cards to contact your provider.  Never give your bank or credit card details over the phone to cold callers no matter who they say they work for. Here is some guidance from the City of London Police on common ways you might fall victim to foul play.

4. Look after your physical and mental health:

Set a daily routine for yourself, talk to loved ones via video links and ensure you get enough sleep. These are all practical things you can do to help yourself stay healthy and keep a sense of perspective when dealing with money.  There are many free apps and other online resources for yoga, meditation, sleep and exercise. Take advantage of them and encourage others to participate with you.  Being tired and worried can lead to poor decision making when dealing with your finances. See the CISI’s mental health portal for advice on how to look after your well-being. LINK

5. Get help early:

Don’t wait until you have no money for essential items - ask for help from your local government, charities or other institutions now and try and plan ahead.  It can take time to find out what sort of help might be available to you and you may need to apply for that help.  If you know that you are going to struggle to pay your mortgage, contact your lender now – most banks are operating a simple form online to apply for this.  Talk to them about mortgage premium holidays and other ways to reduce your mortgage payments.  Make sure you understand the implications of taking a payment holiday – some mortgage terms will mean you still have to pay the interest on those payments, so your monthly payments may go up once you start paying again and it might take you longer to pay off your mortgage. Check to see if you have any insurances that you could make a claim on.

Managing through the cycle

It is important to keep a close eye on your finances whilst we work through this global pandemic.  Ignoring issues will only make matters significantly worse later on.

1. Revisit your budget regularly and identify where you have been struggling.  Tackle those areas with a calm attitude and seek professional help if needed.

2. Be realistic.  Don’t deprive yourself of all your pleasures in life, but don’t go overboard.  If you put yourself on a strict crash diet for your finances, it might work for a few weeks but probably isn’t going to work for many months.  Be sensible.  Cut down on luxuries but don’t cut everything out unless your financial position really necessitates it.

3. Take small actions to improve your financial situation.  Is there any part-time work available?  Are there things you can make from your own home that you can sell online?  Can you do anything to help family, friends and local charities?

4. Try to stay positive  Do not constantly watch or listen to the news, restrict your news updates to once a day.  Plan out what you are going to do each day and you will feel a sense of achievement by doing those tasks.  Stay in touch with others and be honest about how you are feeling but don’t spend the whole conversation talking about the virus.

Try to plan for the future when we get out the other side of this pandemic.  Yes, we are going through very hard times right now, but we will get through this.  We need to stay focused on solutions to our financial issues and not continually focus on the pandemic.  For example, what can you do at home?  What can you plan for when curfews are lifted and we can all go about our daily lives again?  Are there things that you have wanted to do but never had the time to do?”

As always, please do feel free to call me at any time to discuss anything that might be concerning you.

Please do keep safe and of course, Happy Easter!

With warmest regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Touching Base

As we head into the weekend I thought you might appreciate a very brief update on how our investment portfolios have performed over the past 12 months, taking into account the impact (so far) of the coronavirus pandemic.

In the following chart I have shown our lowest risk portfolio (EBIP UK Bond) and then included the 3 most widely used portfolios (EBIP 40, 50 and 60). The purple line is the FTSE 100 which is of course, the index that is quoted on the news every day.  

There is no hiding from the fact that our investments are substantially down over the year but it is reassuring to see that the highly diversified nature of our portfolios has helped shield our clients from the very worst of the falls that we have been hearing about.

On a separate note, the following is a link to an article on Covid-19 which appeared in the Spectator on 27th March. The statistics quoted in the article are already well out of date but it provides an interesting slant on things, nonetheless.

https://www.spectator.co.uk/article/The-evidence-on-Covid-19-is-not-as-clear-as-we-think

As always, please do feel free to call me at any time to discuss anything that might be concerning you.

Stay safe everyone!

With warmest regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Lockdown and anxiety

We are just approaching the end of the first week of the ‘lockdown’ in the UK and I am sure I am not the only one who thinks it feels a lot longer. My wife, Vikki, my two daughters, Ellie and Charlie and I are comfortably holed up at home, trying to make the best of things; the girls have a small greenhouse and they have been busy planting vegetables ……… just in case! Vikki is actively involved with supply chain issues with her company and has never been busier and for my part, I am trying to make myself useful around the house (with mixed results), at least my drumming is coming on a treat and I am starting to look a little less like that Duracell monkey! The most important thing however, is that we are keeping our spirits up whilst not forgetting those who are much less fortunate than ourselves.   

Over the weekend I was reflecting on how everyone might be feeling re their investments and on how they might be worrying about how this ongoing situation might impact their future financial plans. I have already sent a number of these ‘Round Robin’ e-mails in which I have reiterated the advice that sitting tight and not panicking is the correct response when markets crash and we are in the midst of so much uncertainty. However, as I have watched the value of my own investments evaporate (albeit temporarily), I am conscious that many of my clients will nonetheless be feeling anxious and that they might welcome a friendly chat and/or some quiet words of reassurance. If this is how you are feeling, please do not be afraid to call me, you are not being silly by being unsettled by these events and neither is that pit of the stomach feeling of anxiety imaginary, I have it too!

I know many of us will be worried about more than our finances at this time, particularly those with elderly relatives who are really struggling with the social isolation of a lockdown or you may be in a high risk group yourself but please do feel free to call or drop me a line telling me how you are feeling, if you think it would help. I can’t promise to offer magical solutions (if only) but I can promise to listen.

Thinking of you all and your families at this very troubling time.

With warmest regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Lockdown

I think the announcement from the Prime Minister last evening was widely expected and according to a survey this morning, 94% of those asked felt this was a proportionate response to what we are facing, I agree. The evidence from Italy is that a state of lockdown has reduced the rate of infection and the subsequent deaths. It’s early days to claim a 2 or 3 day reduction points to a clear trend but at least it provides some hope and it does follow on from similar experiences in China and South Korea.

Markets have responded well this morning but it’s doubtful we are out of the woods yet, particularly in the UK. I would expect the rate of infections and deaths to increase over the course of the next 2 weeks, as all those that are likely to present with symptoms over that time period, will already have been infected. Let’s then hope that we will start to see similar results from the social distancing and isolation policies. I have a friend who lives in Spain and she says that after a week of ‘lockdown’, infections and deaths are still rising but they are hoping to follow Italy with some improving numbers soon.

Whilst writing I thought I would take this opportunity to share the following chart with you, which looks at global Bull and Bear markets since 1980. The chart has been produced by the US firm Vanguard.

What this chart shows us is that downturns are a feature of markets: they are not an aberration, they are not out-of-the-ordinary, they happen quite frequently and although it’s always something different that causes them, they are to be expected. Exposure to volatility and frequent falls in value, some of them severe, are the price we pay for the long-term growth of our wealth over and above inflation, and in excess of bank interest.

The chart also shows us is that every time there has been a sharp drop in the price of shares – a bear market – it has been followed by a prolonged period of rising share prices – a bull market – that far outweighs the earlier fall. Longer-term charts going back as far as 1900 show exactly the same thing.

Of course, there is no guarantee that this time will be the same, but think about this: when the worst is over, whether that be three weeks, three months, or three years, people will need to buy food and clothes, and they will want to go on holiday and change their cars. I suspect, as with every upheaval like this, the way we do some things will change – hopefully for the better – but the basic human instinct to improve one’s lot will not disappear.

“The investor who says, this time is different, has uttered among the four most costly words in the annals of investing.” †

And finally, a cartoon from US financial planner and artist Carl Richards, of the Behavior Gap

Your financial plan is a long-term strategy, looking decades into the future, I have no intention of letting that be derailed by what’s happening over the course of a few weeks or months.

But do please do let us know if you have any queries or concerns. That extends to letting us know if you are feeling unwell and don’t have anyone else to talk to. And if you have family or friends that are worried about their finances and don’t know where to turn, please put them in touch – we’ll help if we can, even if it’s just a listening ear.

And above all, stay safe! Your health and wellbeing are more important than anything else we could be talking about.

† John Templeton ¥ There’s plenty more excellent drawings on Carl’s website, if you’re interested.

Please note that past performance is not a guide to the future, the value of an investment and the income from it could go down as well as up. You may not get back what you invest.

As always, if you have any questions concerning this e-mail or any other finance related matter, please do feel to contact me at any time.

With kind regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Seeing Past the Coronavirus Shock

I am most anxious not to inundate you with information during the Coronavirus outbreak but I feel sure the occasional update will be well received. It is my intention to provide such updates each week as the situation develops, for the time being.
The following is a blog post from yesterday by Alistair Meadows of EBI Investments Ltd. It is EBI who construct our investment portfolios.

“As unexpected shocks go, Coronavirus ranks in the very top tier of events capable of disconcerting investors, amongst the Great Financial Crisis (GFC) and Black Monday. Whilst news continues to horrify many investors with the human and economic implications, buried in the latest data in what statisticians refer to as “the inflection point of a logistics curve”, is a sign that the very worst may be over.

February news was dominated by the global spread and impact of the Coronavirus (Covid-19). Dow Jones, S&P 500 and the FTSE All-Share fell by over 14%, 12% and 11%. So far in March (16th March 2020), these Index markets have been continuing their decline and the correction has now developed into a full-scale bear market.

The first wave of market declines was influenced by two drivers: The world supply chain being compromised and the closure of much of China’s businesses. China is responsible for approximately 16% of World GDP and 35% of World GDP Growth.

Commodities (raw materials; sugar, rice etc) have also felt the impact of the virus. Unsurprisingly, the impact is increased when looking at the products China heavily consumes. Raw materials price declines have a shockwave effect to export dependent countries; Brazil, Chile and Peru have high export trade as a proportion of their GDP (approximately 29%, 59% and 49% respectively). All will be feeling the pinch.

The second wave has been primarily driven by one factor; failure to contain the virus globally, leading to the coronavirus being declared a pandemic by WHO (World Health Organisation), with Europe now as its epicentre.

The severity within Europe has caused some countries to shut down, imposing country-wide lockdowns, border closures and curfews to control the virus. Countries like Italy, Spain and Germany now have more active cases of the coronavirus than China.

As coronavirus spread to North America, the Federal Reserve cut interest rates to zero and launched a $700bn stimulus programme in a bid to protect the economy from the effects of coronavirus.

The consensus for the short run is that the situation is most likely going to get worse before it gets any better. The credit rating agency Standard and Poor (S&P) stated "The initial data from China suggests that its economy was hit far harder than projected, though a tentative stabilisation has begun…Europe and the United States are following a similar path, as increasing restrictions on person-to-person contacts presage a demand collapse that will take activity sharply lower in the second quarter before a recovery begins later in the year."

Nevertheless, amongst the bad times of late around the globe there are now some positives. The high levels of quarantine measures taken in China are easing and the President is urging China’s inactive workforce to now return to work. Additionally, the realisation that global slowdown in supplies hasn’t affected domestic consumer prices yet, which is a positive. China’s experience serves a model of how the rest of the world can control coronavirus, locking down and quarantining huge sections and building hospitals to increase capacity appears to be working.

In addition, new academic analysis of the infections data suggests that for Italy, the shape of the graph’s curve of is forming what statisticians refer to a logistics or “S” shaped curve, changing the shape away from the exponential “J” shaped curve so the current state forms an inflection point. This demonstrates the success of the lockdown model.

Source: http://nrg.cs.ucl.ac.uk/mjh/covid19/

We are also now universally seeing all countries taking drastic measures to help stop the spread of coronavirus and providing economic stimulus to help the economy deal with the effects of the outbreak, for example, the US and the UK have provided emergency rate cuts and countries are starting to provide economic stimulus.

As hard as it may seem, fear and panic should not be allowed to drive investment decisions. In general, it’s good to remember that any losses incurred are only realised if you sell. The idea that markets go up and down and don’t show a continuous level of performance is no surprise.

Remember, EBI Portfolios’ all-weather investment philosophy offers a long-term investment solution suitable for any market regime or circumstances, so it should be no surprise we are focusing on the long term. Unless you believe that capitalism will be brought down by a virus, this most likely is just another bout of selling that will lead to buying again.

Please note that the value of investments and the income derived from them may fall and you may get back less than you invested. Past performance is not a guide to future performance.”

As always, if you have any questions concerning this e-mail or any other finance related matter, please do feel to contact me at any time.

With kind regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Clearwater Remote Working

In accordance with Government guidelines and in the interests of our team and clients, we have decided to operate a ‘work from home’ policy, until Government advice changes. An obvious implication of this is that we will not be able to hold client meetings at our offices for the time being. However, Adam, Kim and I remain committed to providing the highest level of customer care and we have every confidence that this can be maintained, even though we will be working remotely.

Please note the following:

1. We will be observing normal office hours – 09:00 to 17:00. However, I am likely to see e-mails outside of these times, if you have an urgent query.

2. If you need to call us, please use the usual office telephone no. 01494 717000. If, for any reason you are unable to get through at the first attempt, please leave a message (or send an e-mail) and someone will get back to you as soon as possible.

3. Our preferred method of communication throughout this period will be by e-mail. As we will be working remotely, it would be helpful if you could copy all 3 of us in on any communications, our respective e-mail addresses are below:
   graham@clearwaterwealth.co.uk
   adam@clearwaterwealth.co.uk
   kim@clearwaterwealth.co.uk

4. It should be possible for us to arrange a video meeting, if this would be helpful. Please just call in the first instance, so that we can agree a mutually convenient date and time.

I have been in discussion with our platform providers (Transact and Standard Life), their business continuity systems are robust and your access to their websites will not be affected. We do not expect work standards and timeframes to change throughout this difficult period but if you do experience any undue delays, please notify us immediately and we will do everything we can to rectify the situation.

These are unprecedented times but please rest assured we will continue to provide any help or guidance we can throughout.

As always, if you have any questions concerning this e-mail or any other finance related matter, please do feel to contact me at any time.

With kind regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Clearwater Portfolio Update

I know many of you will be more than a little concerned about the fast developing coronavirus situation, not just from a health perspective but also from the point of view, how is market turbulence affecting your investments?

Probably the best way to answer this question is to take a look at the following 2 charts:

This first chart shows how our lowest risk portfolio (EBI UK Bond) has performed since 1st January when compared with our highest risk portfolio (EBI UK 100). The dramatic difference in fortunes is plain to see, with the Bond portfolio actually increasing through most of this coronavirus scare (well, so far at least).

We will look at a wider range of the portfolios below but please remember each portfolio contains an element of the Bond portfolio and the 100 portfolio. As an example, EBI UK 60 is essentially 60% of the 100 portfolio, blended with 40% of the Bond portfolio, and so on.

This second chart shows how a higher exposure to Bonds has cushioned some of the portfolios from recent falls.

My advice remains resolutely that, unless our clients are in dire need of funds, they should attempt to ride out what is likely to be a painful but temporary downturn and NOT to disinvest at this time. However, if you feel you have no alternative, it will be possible to take money just from the Bond element of the portfolios, thus not selling equities (shares) when it is clearly not sensible to do so. This will change the balance of what remains in the portfolio to higher risk but this can be addressed by a ‘rebalance’ when markets recover.

If this is something you feel you need to do, please contact Adam and he will advise you how to go about this.

Serious though this situation undoubtedly is, now is the time to put on one’s tin hat and hide behind the sofa, until things improve.

As always, if you have any questions concerning this e-mail or any other finance related matter, please do feel to contact me at any time.

With kind regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

Update on today’s stock market falls

I received the following this morning from Tatton Investment Management on the sharp falls in stock markets today and I thought you might find it interesting. For once, it’s not all about Coronavirus!

“While most people spent the weekend dealing with the prospect of the COVID-19 epidemic taking hold of UK life, the financial community woke up this morning to another, different – even if slightly more familiar – type of upset: an oil price shock that unfolded over the weekend.

Oil prices have plunged by more than 30% since last week. Together with recent declines, this means that the price of oil has more than halved since the beginning of the year. At the same time, a flight to the perceived safety of government bonds has pushed up bond prices, leading to the lowest yields ever seen on US Treasuries as a result of the inverse relationship between bond prices and their yields.

As a consequence of the double whammy, the already highly nervous stock markets have reacted with what can only be described as panic selling. After falls of around 5% in Asia, European stock markets are opening down by at least as much and in some cases more.

Altogether this news flow will lead many to feel slightly apocalyptic – or at least as anxious as they might have during the darkest days of the financial crisis back in 2008/2009.

But pause for a moment and it becomes clear that this oil price collapse is a total reverse of the most significant oil crisis that took place in the 1970s. This time around, the Saudis decided to push the oil price down, not up, and falling yields take pressures off borrowers, rather than increase it.

This is very different territory compared to previous oil price shocks. So, what is going on?

Following the already significant declines in the oil price since the beginning of the year, there had been widespread expectations that OPEC (plus Russia) would agree to production cuts to stabilise the oil price. It therefore came as a shock to oil traders and their positioning towards rising prices when the opposite outcome occurred over the weekend. Essentially, this means that Saudi Arabia and Russia opted for a resumption of the price war of 2015/2016. Just as now, this strategy was aimed at decimating the competition of US shale oil and gas producers, which require a higher oil price threshold than Saudi and Russia to remain profitable. Just as Trump pursued a strategy of ‘kick ‘em when they are down’ with China last year, it appears the same tactic is now being applied to US oil producers.

Given that the shale producer defaults and the resulting stress in credit markets caused a stock market correction back in Q1 2016, it is not overly surprising that capital markets are following the same script now. Is it likely then that history repeats itself and we are about to witness an even bigger crash than 2016, due to the double whammy of Coronavirus disruptions and oil market upset?

Well, that’s possible in the very short term, but the overall financial, political and economic environment is a different one compared to four years ago. First and foremost, a repeat of the oil price war tactics from back then will no longer carry the same surprise factor. We can expect a much better-informed reaction by the US central bank and government to this renewed onslaught.

Back then, the biggest issue was that mass defaults across the US oil industry would increase the yield costs of corporate credit for all US businesses. Therefore, it is reasonable to expect the Fed will react very quickly to minimise this risk and use its immense quantitative easing (QE) firepower to sell US government and mortgage bond holdings and buy corporate credit to counter any selling pressures. This would also have the effect of easing any ‘flight to safety’ induced supply shortages within government bond markets.

What is more, neither commodity markets nor commodity producers are coming from bubble territory as they did four years ago. This time, there is unlikely to be a similar demand decline from resource industries for manufactured goods, which have already been forced to scale back expansion plans. On the other hand, a halving of the oil price, together with a significant reduction in the cost of borrowing, constitutes a significant stimulus for the global economy and in particular emerging markets, which will additionally benefit from an accompanying fall in the US$.

Our take on this morning’s stock market rout is that faced with this shock surprise action by oil exporters, market participants have become overwhelmed by a doubling up of concerns from the virus disruptions and memories of what happened the last time when oil prices traded at these levels.

We expect some decisive actions from central banks, or at least announcements in this direction. Such actions are unlikely to amount to another round of monetary QE from the Fed, but rather a swapping of government bonds already on its balance sheets with direct purchases of corporate bonds, given that the big falls in government yields from the increased demand in bonds allows them to take supportive action without pushing up yield levels. The Fed has the means to put out this specific fear driven ’fire’, while the economic stimulus effect from the lower cost of energy and of capital should prove to be a very welcome relief over the coming months for the virus disrupted global economy.

At the end of a tumultuous time for stock markets last week, the US stock market rallied hard into the close, leading to a slight weekly gain in those markets overall. This week may well prove similar as there are many more seasoned investors sitting on vast amounts of uninvested cash following years of overextended prices for risk assets.

Perhaps it is worth mentioning that due to unattractively high valuation levels, Warren Buffet’s Berkshire Hathaway fund was at the beginning of the year sitting on uninvested cash of around £130billion. As Warren Buffett is fond of saying: “Price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

As always, if you have any questions concerning this e-mail or any other finance related matter, please do feel to contact me at any time.

With kind regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

It’s that time of the year again!

As we approach the end of the 2019/20 tax-year, thoughts inevitably turn to end of year tax planning and any unused allowances (ISA, Pensions etc.) that may be available.

The ISA allowance for 2019/20 is £20,000 and if you have not made a subscription (or perhaps you have only made a part subscription), there is still time to use this allowance, if you have the funds available.

Since 6th April 2016, in addition to the subscription, it has been possible to top-up ISAs by any amounts withdrawn during the tax-year, including any charges deducted. This means that even if you have not made a subscription this year but have ISAs from previous years, your personal ISA Allowance may be more than £20,000 because of charges deducted during the year. If you made a subscription at the beginning of the tax-year, you may still have a residual allowance left because of these deductions which can be utilised by 5th April 2020.

If you have a Standard Life Wrap Account, the scope for top-up (in addition to any unused subscription) does not apply, unless you take physical withdrawals from your ISA. This is because Standard Life deduct ISA charges from the cash held in your Portfolio and not from the ISA itself.

If you have a Transact Wrap Account and you would like to know your personal ISA allowance for the remainder of the 2019/20 tax year, you can access this information on the Transact website. From your home page, select reports and from the drop-down menu, select ISA Subscriptions.

If you would like to use the balance of your allowance before 5th April, please ensure you advise us of your intentions before the end of March; we will be very pleased to assist. If your ISA is with Transact, please give us as much notice as possible, as a form may be required, if you have not made a subscription since Tax year 2018/19.

Just for information, the ISA Allowance for 2020/21 is likely to remain £20,000 each, so £40,000 per couple.

If you have any concerns or questions about the above or indeed any other finance related matter, please do not hesitate to call me at any time.

With best wishes,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner

What to do?

1. DON’T look at the markets, market commentaries or your portfolio’s value. The only effect will be to tempt one to do something- and that “something” will almost certainly be the wrong thing.

2. The more bearish investors become, the more they sell short both markets and individual shares. So far, attempts to “buy the dip” have failed, but once a critical level of short positions are established, (or the news is not as apocalyptic as is currently supposed), there will be few sellers left, leading to a scramble to buy back, thus causing a sharp price rise and a re-establishment of the demand/supply balance. Market complacency is being challenged in the only way it can be- by maximising trade volumes, which in this instance means “forcing” investors to sell, via sharp declines in price.

3. (Re)-examine your risk tolerances. It is easy to get over-confident (and thus over-exposed) when prices seemingly rise effortlessly. This should be an opportunity to check that your market risks are still aligned with your ability and willingness to take those risks. That should be the only reason to act (and even then, selling now may not be the optimum response).

4. Focus on the long term. Unless you believe that capitalism will be brought down by a virus, this is just another bout of selling that will lead to buying again, as investors recognise that they have (once again!) over-reacted. Since January 21st, when concerns over the virus first got started, the Shanghai Composite Index has out-performed both the S&P 500 and the German Dax Index- China is supposed to be the epicentre of this crisis!

5. Things have a way of working out on their own - Bernie Sanders IS a genuine socialist and WOULD be a disaster for both markets and the economy across the world, but betting money appears to be far more sanguine. It seems that the higher the odds of Bernie’s nomination get, the more likely it is that Trump will win…

AND a final thought. Arguably the world’s most successful investor (certainly most well-known), Warren Buffet, was reported to have been down $340 million in March 2009, following the financial crisis but lost nothing, because he didn’t sell!  

As always, if you have any questions concerning this e-mail or any other finance related matter, please do feel to contact me at any time.

With kind regards,

Yours sincerely

Graham Ponting CFP Chartered MCSI

Managing Partner