SUMMER 2021

Handling high markets

Most of the world’s major stock markets are at or close to their all-time highs, but that is not necessarily a reason to stop investing.

Global stock markets have been performing strongly since the first successful vaccine trials in November 2020. Even the UK, which has lagged behind in recent years, has picked up, with the FTSE 100 index crossing the 7,000 barrier again.

If the flow of “…hits new high” headlines has given you doubts about investing now, there are several strategies to consider:

■ Drip feeding Instead of investing a lump sum all at once, spread the investment over a period. That way all your money will not get invested at a market peak. The corollary is that you may miss out on some investment
return.

■ Keep an adequate cash reserve Make sure you have sufficient instant access deposits so you can avoid cashing in your investments if you need funds quickly. A paper loss is just that until investments are realised – as events since February 2020 have demonstrated.

■ Be aware of sequencing risk If you intend to draw on your investment immediately – for example by starting pension drawdown – a sudden market drop can have a dramatic effect on the sustainability of withdrawals. There are several approaches to limit this risk, such as holding a separate low risk reserve.  For more  Information on these and other high market strategies tailored to your personal circumstances, please contact us.

The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

In this issue:

» Dividends recover in 2021
» Tax planning for families
» Track down lost assets
» The future of inheritance tax
» Second home sales rise
» The importance of portfolio rebalancing
» ‘Greenwashing’ in investment
» News Round Up