“The art of living is more like wrestling than dancing, because an artful life requires being prepared to meet and withstand sudden and unexpected attacks.”
———- MARCUS AURELIUS, MEDITATIONS, 7.61
Dancing is a popular metaphor for life. One must be limber and agile and go along with the music. One must feel and follow and flow with their partner. But anyone who has tried to do something difficult, where there is competition or an adversary, knows that the dancing metaphor is insufficient. Nobody ever tries to get up on stage and tackle a dancer. The dancer never gets choked out by a rival.
For a wrestler, on the other hand, adversity and the unexpected are part and parcel of what they do. Their sport is a battle, just like life. They are fighting an opponent as well as their own limitations, emotions and training.
Life, like wrestling, requires more than graceful movement. We have to undergo hard training and cultivate an indomitable will to prevail.
Life feels like one big wrestling match at the moment. Our opponent is relentless and keeps coming back with different moves. One step forward and two steps back.
It is difficult to maintain our composure and control, but we must. We must also trust our training, our habits and the tried and tested. In difficult times, we draw on our inner strength and lean on our “support team” for reassurance. We are part of your support team and are here for you if you are struggling with anything, need that reassurance or someone to lean on. If you have friends, family or colleagues who are wrestling with life at the moment, we are happy to chat.
Some of you will be aware that the Bristol team moved into new offices at the beginning of the month. Whilst the majority of the team are still working remotely, we have some physical presence on a daily basis and that is a step in the right direction.
Because we recognise that life happens and that it is a real challenge at times, we want our team to remember that life comes first. Therefore, with effect from 1st October, our offices will be closing at 4pm on a Friday. This will allow the team to start their weekend earlier and spend time with the important people in their lives or doing what matters most to them. Our offices will continue to be open 9am-5pm Monday to Thursday.
I’d like to share this short time-lapse video with you as local artist Silenthobo painted our new wall mural.
It has now been 6 months since the introduction of a UK wide lockdown. My last article introduced additional easing of lockdown and just 4 weeks later we are now subject to increased restrictions! Please don’t ask me to explain the current changes to living our everyday lives as I’m as confused as you!
So, I’ll concentrate on bringing you the third and final element of the Advice Tree I first introduced to you a couple months ago. But before I do that, I have been reflecting on the interactions I have been having with clients and their families since the onset of lockdown back in March. There is no doubt that Covid-19 has impacted people in many different ways and a recent conversation with a friend reminds me that livelihoods have, in some cases, been very adversely affected as a direct consequence of the pandemic.
To explain, my friend is a very successful company executive with high earnings and associated benefits with a large UK employer. Well, he was until he was made redundant recently as a consequence of the financial impact brought about by the pandemic on the company employing him. Suddenly, he found himself out of work for the first time in his career. What’s more, he had never paid a lot of attention to his personal finances as his monthly income was more than adequate to meet his family’s normal expenditure and he was a member of the company’s Pension Scheme. Now, he has his redundancy capital payment but no regular income. He is approaching age 50 and has been a member of his company’s Pension Scheme for many years but is faced with a decision over the future of his pension benefits. He is also concerned that he has not made the most of his savings.
I shared the Advice Tree with my friend and it is fair to say that he was relieved to learn that Brunel are able to help him and his family make the best decisions for their financial future. If you have any members of your family or friends that may have suffered in a similar way, please do not hesitate to speak to your Planner to see if we can help. We would be delighted to hear from you.
Now for the final element of the Advice Tree, the Money branch.
Sequence of return risk mitigation – thus avoiding the negative impact of taking withdrawals at the wrong time. This is a pernicious risk that few investors are aware of. It can have a massive impact on how long your pension fund will last. We can help you plan and take the steps to mitigate that risk.\
Investment due diligence – There are more than 9,000 investment instruments available in the UK and we research the market on your behalf to give peace of mind that a rigorous due diligence process has been applied to the investments we recommend to you.
Risk Assessment – risk is a complex subject with many dimensions. We help you navigate and understand risk to ensure the investments we recommend meet your requirements.
Portfolio management and rebalancing – we use sophisticated tools to maximise your return for a given level of risk/risk tolerance. Rebalancing your portfolio twice each year means that your risk is managed in line with your risk tolerance and financial goals.
Tax efficiency – we use all the applicable tax reliefs and allowances available to you each year. Estimates suggest that this could boost your investment returns by 1% per year. So, on a £400,000 Portfolio that would be £4,000 per year.
I hope you have found the Advice Tree a helpful insight to the service we provide to our clients and of course to prospective clients. As always, please contact your Planner if you have any questions.
Until next time, I wish you and your family good health.
Looking back on my last communication, I advised we were preparing for the move to our new office in Bristol. I am pleased to say, our team of Sara, Kate and Andy have successfully completed the office refit and delivered a professional and personalized space for us to work. As the Finance Director, I am especially delighted they were bang on budget, so a big thank you to all involved.
As a taster, this is the original mural we had painted on the main wall by a young Bristol artist Wei Ong (Silent Hobo). As you can see, he has captured the Brunel and Ironbright logos in the Balloons going over the iconic Clifton Suspension Bridge. I must say, we were all ‘blown away’ by Wei’s mural. Assuming a return to face to face meetings next year, we will be delighted to meet you at our new office if you wish and show you around.
Whilst writing this, I am recovering from a dose of anesthetic following a trip to the dentist to have a crown fitted. It did make me think if we were returning to some normality as this work has been deferred since lockdown. On seeing my dentist fully PP’d up and advising he could only see 2 patients a day for this type of treatment, I realised we are still some way off the ‘normal’. This is reinforced by the government announcements as we see saw between the daily changes of numbers of people we can see or the daily changes to quarantine rules if we have managed to travel abroad.
So, as we move into Autumn, the never-ending Brexit negotiations are back in the news. It is clear from what we have seen in the financial markets this week, the daily news flow on deal or no deal continues to impact on the direction of the UK stockmarket and £ exchange rate. I have picked a couple of interesting articles on this subject for you to read if you so wish.
To reinforce Steve’s message last week, even with these Brexit and Covid 19 concerns, the Ironbright investment philosophy continues to follow its 3 guiding principles – Belief in the future, patience and discipline. We are optimistic and believe in long-term progress. Capital Markets work. They are far from perfect, but they do a good job of fairly pricing all available information and investor expectations about publicly traded securities. Once money is invested, patience is needed with an eye on the long term rather than what markets are doing today; and discipline, delivered through careful asset allocation, diversification and regular rebalancing of asset allocations to keep portfolios in line with the course set.
Whilst we navigate through this uncertainty, we continue to ensure your financial plans are on track and anticipate meetings will continue by Zoom or Teams. Even though it is not quite the same as a face to face meeting, I was re-assured from the feedback I had from a client meeting I held yesterday, where we had some complex scenarios to navigate, we can still deliver effectively your lifetime financial planning through a virtual meeting.
Stay healthy, safe and optimistic.
Earlier last week the S&P 500 index (a market capitalisation-weighted index of the 500 largest US publicly traded companies) completed its fastest recovery from a Bear Market in history. At its lowest point, year to date, it was down just over 20%, but at the time of writing it is up just over 10%. It’s madness.
Anyone with half an eye on the parlous state of the world economy may agree that this is quite extraordinary. The pandemic has caused enormous pain on global businesses with dividends being slashed, companies announcing mass redundancies and recurring profits warnings from the great and the good.
Investment markets have many drivers that determine its pricing, which I will not bore you with here, but there is an adage in the industry that there are 3 things you need to know about the stockmarket:
Rule 1: “the stockmarket is not the economy”.
Rule 2: “the stockmarket is not the economy”.
And “yes” you’ve guessed it…
Rule 3: “the stockmarket is not the economy”.
Aligning the current state of the economy to the value of your portfolio just does not compute – it never has. The majority of you do not like too much excitement, which means that you invest in the IronBright 50 portfolio or in lower risk-rated ones, such as the IronBright 30 portfolio (we go up in factors of 10 to the IronBright 100 portfolio, which is entirely equity based and is a little bit racy).
The performance figures year to date are interesting because if you looked at them, you would never guess there is a global pandemic and an economic meltdown (figures since the beginning of 2020) although I grant you the FTSE still looks a little poorly:
|MSCI World Index*||+5.31%|
|IronBright 30 P||-0.57%|
|IronBright 50 P||-3.77%|
|FTSE All Share||-20.65%|
(*MSCI World Index is an index designed to track broad global equity-market performance. It is comprised of about 3000 companies from 23 developed countries and 26 emerging markets).
IronBright applies an investment strategy that includes very strict disciplines when it comes to international diversification, employing and accessing a number of fund managers, asset classes and currencies that control overall risk, and it won’t surprise you that we always remain optimistic about the future returns from the market.
We don’t gloss over the world’s problems and we are regularly reminded that the important things in life remain the health and happiness of our family and friends; money remains secondary to this but I hope that you feel reassured that IronBright continues to successfully look after your financial affairs so you free to focus on what is most important to you.