The continuation of the lockdown, albeit with a chink of light from the government on this being relaxed slowly through June and July, continues to give us time at home we would not normally have had. In my conversations with clients, I have been impressed by how we have adapted and how we have used the time to reflect and consider some of the benefits of these circumstances.
Following the frosts of last week, it definitely feels Summer is now in full flow and judging by my recent trip to the garden centre to buy some compost, gardens are probably looking their best in years. You probably guessed that I was greeted by a wry smile and went home with an empty Land Rover! Fortunately, Dr Buchan came up with a solution of using her stash of grow bags to pot up yet more plants and vegetables. Plant trading has become the new lockdown norm – social distancing firmly adhered to!
The fruits of her labour are now in full bloom. The view from my home office is a show of colourful Lupins (yes, I have been educated on all our different variety of plants). Much more pleasing for me, I have picked our first strawberries and the raspberries are not far behind. The first picking is always the best. The vegetable garden is now fully planted, and we wait to be self-sufficient over the next few weeks. The good life is in full swing.
Even our pets have joined in the joys of summer. Four mice caught last night by our two cats; eggs a plenty from the chickens and our 4-month-old Cockapoo now thinks he can sniff out truffles. I hope so as my Italian father-in-law will be very happy. A trade of truffles for wine seems fair to me!
I am sure your discussions with us have encompassed similar topics. With holidays on the back burner we can share garden and family stories before moving onto your reviewing your financial plans. Dan and I were only saying today how we missed our face to face client meetings; Zoom/Teams and telephone calls are not quite the same, but as we adapt, I am sure we can get better.
I hope that you all remain healthy.
Brunel Capital Partners
I hope that everyone is keeping safe and well.
The slight easing of the lockdown has lifted spirits in the Rylett household somewhat. We are now able to meet up with another person from outside of our household for the first time in months and just get out a bit more. Exciting stuff! I think this is extremely important for our sanity and mental health.
For us at Brunel, it is more of the same. The safety of our team and clients is paramount, so we will continue to work from home and we will only return to the office and offer face to face meetings when it is safe to do so.
There has been lots of talk about a recession this week and markets have been reacting to the news. We all know that the economy will suffer as a result of the crisis but what we don’t know is how deep it will be or for how long it will last.
As always, our advice is to maintain a long-term approach and not make any knee-jerk reactions. Your investment portfolio should be aligned with your objectives and if they haven’t changed, your portfolio shouldn’t change.
I wanted to share a couple of articles with you this week. The first, from me is a short note on being prepared for the unexpected. The second is from our friends at Vanguard about the nature of economic recoveries.
I hope that you find them of interest and as always, we welcome your feedback and if there is a particular topic you would like to hear from us on, please let me know.
If you have concerns or questions or would like to discuss your financial arrangements, please get in touch with your financial planner.
With best wishes
Brunel Capital Partners
We’re here for you – a message from the Brunel Team
To all our clients, we are here for you.
We have taken the necessary steps to deliver our service from our homes but as you can see, we are in regular contact with each other. The transition to working from home has been successful over the past 7 weeks. We are really benefitting from the extensive use of technology.
Boris Johnson is due to share his “roadmap” for easing the coronavirus lockdown on Sunday in a televised address to the nation. However, this will follow today’s (7th May) official review of the nationwide shutdown, which is expected to be extended by a further three weeks. So, any easements would not be permitted until the end of this month. We will be working from home for some time but this does not pose a problem albeit, we all look forward to the day that we can meet up with our clients on a face-face basis.
Some clients have asked whether investment markets have reached the bottom? Well, markets have displayed a remarkable turnaround since the lows in March. How can this be when the news is so bad, not only economically but health wise too? It may well be that the lows have been etched out, at least for a while. My point is that we all know the bad news and exactly what has caused it. We know the virus will be with us for quite some time to come and we are going to have to adapt. Business is remarkably good at adapting, at least the good ones – you have to deal with change all the time.
There has been unprecedented action from central banks and governments. Governments have taken fiscal action injecting money into both business’s and people to make sure there will be an economy to come back to. It’s not perfect, but it’s a good work in progress.
We will do our very best to help our clients navigate through these very difficult times, rest assured.
What do you dream of doing most once this is over? I crave sitting at a beach restaurant with a glass of great red wine, somewhere buzzy, surrounded by happy people! There are other activities such as having family and friends over, watching a film from a cinema seat and to get in the car and drive for longer than is currently permitted.
Pop Master update: my wife continues to win!
The Brunel team are here to help you, so please do not hesitate to get in contact if you would value a discussion. In the meantime, I wish you and your family a happy and healthy bank holiday weekend.
Brunel Capital Partners
“It’s an unforeseen problem,”…
“It came out of nowhere”.
These were the words President Trump used to describe the new coronavirus. The market crash that accompanied the crisis was a similar surprise.
It has been described as the Black Swan of 2020, a Black Swan is the term used to describe an event that comes as a complete surprise and has potentially severe consequences. It comes from the observation that European explorers, when in Australia, saw black swans for the first time. They had only ever seen white swans.
In his book, “Black Swan” published in 2007 Nassim Nicholas Taleb popularised the term, just before all hell broke loose on the financial markets. Black Swans can only be seen with hindsight, and therefore they are often used as a convenient excuse. “We didn’t see that coming” is often said by politicians or fund managers when admitting their failure to spot any warning signs.
“Expect the unexpected.” “Be prepared” “contingency planning.” These are all phrases that we are familiar with. We all take out insurance for events that we hope will never happen.
So I don’t buy the Black Swan argument. If we are looking for a metaphor, I love the idea of the grey rhino. Michelle Wucker writes in her book, “The Gray Rhino”, that a grey rhino is a highly probable, high impact, yet neglected event. Grey rhinos are not random surprises, but occur after a series of warning signs and visible evidence.
I love rhinos. They are my favourite animal. The reasons for that are probably worthy of another article. I have a picture of a rhino on the wall of my office, amongst other items that remind me of this incredible creature.
Before a rhino charges it stomps around a bit, snorting and getting angrier. It is giving you plenty of opportunity to act, take action and get out of the way. Believe me, you want to get out of the way. Once this two-tonne beauty gets going, it is very difficult to stop and the damage could be irreparable.
So why am I talking about this? What has this got to do with you or your finances?
Throughout our lives, we are constantly faced with grey rhinos. There will be another global pandemic in the future. How can you prepare yourself for it? Could this be by ensuring you have enough savings to fall back on to get you through the difficult times? Is your investment portfolio aligned with your goals and your appetite for risk? Can you still do all the things that you want to in life if markets tumble? What have you done to ensure that your family will be protected in the event of death or illness?
This list is not exhaustive but just some of the questions that a financial planner can help you answer.
So my advice is to pay attention to the grey Rhino. Look to head off the things that we can see in front of us. The alternative is to spend our time, looking back for black swans.
If I was to come face to face with a rhino. I’d want a plan.
If you want to get ready and build that plan, please get in touch.
So, both my wife and sons asked me today how long we had been in lockdown? I was surprised I could not remember. A good friend of mine said it was probably because I was comfortable working from home and the simplicity of our new life was creating a relaxed environment. Having a 12-week-old puppy around has helped. No time to reflect or get bored!
I am sure you are all adapting in your own way and have developed new routines. Virtual Pilates and Yoga sessions 3 times a week has been my favourite so far. I watched Grayson Perry last night on how he is encouraging people to use art to help fill their lockdown days. It was interesting to hear what he missed most of all was being able to dress up as a woman and show off. Each to their own.
As you know from our regular weekly communications, our team have adapted to their new working practices and of course, like you, they are looking forward to returning to normality sometime in the future. None of us yet know what this is going to look like! In the meantime, we continue to devote our energies to look after your financial plans and wealth.
This week has been a relatively quiet week in the financial markets. Given the extreme levels of monetary and fiscal stimulus, we believe there is a high chance of a strong economic and stock market recovery to follow. However, we continue to believe the best case over coming weeks is a period of consolidation, while the worst case is a fall back towards the low we reached in mid-March. Much depends on market reaction as we move into the heart of the earnings reporting season and receive more economic data that reflects the significance of the shutdown.
Brunel Capital Partners