Goalkeepers love penalties because it is their turn to shine even though the odds are always stacked against them, but that is the beauty of sport – its uncertainty, anything can happen on the day. They can be the hero. The trouble is that too few do, in fact, become that hero.
An analysis of 286 penalty shootouts found roughly 50% of keepers leaped left, 44% leaped right and only 6% stayed in the middle. Interestingly though, the study also showed that 39% of actual kicks were struck down the middle, with the rest broadly going right and left in equal proportion. So, if nearly 40% go down the middle, why do only 6% of goalkeepers recognise that by staying put, doing nothing, will produce the best results?
The answer is probably down to “Action Bias”, which is our tendency to act even when doing nothing is better. Goalies may be keen to act to avoid regret and the recriminations of teammates – imagine Jose Mourinho’s reaction when the penalty is scored if Hugo Lloris had done nothing but stand in the middle of the goal! Doing it consistently right in one game, over the course of a season, over a career is very difficult but when nearly 40% of penalties go down the middle the game plan must surely be “be brave and stick to your guns”.
I have been reminded of this research over the past few months when colleagues and clients have asked what IronBright is doing differently to deal with the seismic events that enthral us all and what changes we are making in the portfolios to deal with the impact of the pandemic … and the answer is “nothing”. But remember that doing nothing is not the same thing as not having a plan. We do nothing that is not in our plan.
We do not try and second guess the market because crystal ball gazing and tea leaf reading skills remain out of our reach. The lion’s share of your longer term returns come from holding your asset allocation, which we reset every six months through the May and November re-balances; this is a discipline that generally means we sell high and buy low throughout the year, every year.
It has been a terrible year for many reasons but the portfolios that we look after for you are holding up very well. The FTSE All Share remains down -19.70% year to date whereas the IronBright 50 P portfolio (which reflects most client assets) is down just -2.82%. Even the racier IronBright 70 P is only down -5.13%.
When the pressure is on, we do not chase markets. We do not jump right or left if our plan is to stay still. We have strict investment disciplines that we abide by when it comes to managing your money and it has worked for you over the years that you have been kind enough to entrust your money with us.
I hope that you all remain fit and healthy and on behalf of the entire team I would like to thank you for your continued support and good humour.
“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.
I’m not going to lie, but at times, the last four and a bit months has been a real struggle. It would be very easy for me to sit here and say that it’s been a wonderful experience but I’d be lying to you. Don’t get me wrong, there have been some real positives to come out of this situation. However, there have been down moments. A real rollercoaster of emotions.
I think it’s important to recognise that many of us have never experienced anything like it in our entire lifetimes and may never do so again. We have all had to cope with a huge amount of enforced change.
Not being able to see your family or friends when you want and give them that all important hug. Being told that you can only leave the house for limited reasons. Not being able to enjoy our hobbies and recreational activities, sports, going to the theatre or going out for a meal. Having to constantly think about distancing and wearing a face covering in public spaces. Holiday plans cancelled, home schooling, GCSEs and A-levels cancelled. Having to work from home. I should also mention that some of us will have lost friends or loved ones as a result of this crisis. I could go on and on but I think you get my point. We human beings are a resilient bunch, but come on, give us a break.
I was lucky to enjoy a family holiday in Cornwall a few weeks ago. The change of scenery, extended break and time with my family came at the perfect moment and was also a great opportunity to reflect on recent events and the future.
So this is the thing. Events happen. We can’t change the events but what we can do is choose how we react to the events. You can’t change the past. I am forever being asked “If you had your time again, would you do anything differently?” The answer is always “No”. I wouldn’t be the person I am today, with my wonderful family or business if I had chosen a different path. Yes, I’ve made plenty of mistakes and poor decisions but these are what define you as a person.
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
Contrary to common belief, it wasn’t Charles Darwin who said this. It was Leon C Megginson, Professor of Management and Marketing at Louisiana State University in 1963.
I love this quote and it is this ability to react, adapt and get ourselves ahead of the curve that will see us succeed and prosper.
As a FCA regulated firm, we pay regulatory fees each year to simply just open our doors. These have increased every year since we have been in business. This year they have increased by almost 40%. Part of this fee is a levy towards the Financial Services Compensation Scheme (FSCS), a fund that pays out to investors who have lost out due to being sold inappropriate products and investments. We are simply funding the mistakes and poor behaviour of other firms. Have any of our clients ever been put into an investment that has needed to be bailed out by the FSCS? No. Is it irritating that we should have to fund the scheme? Yes. Can we do anything about it? No.
What we can do is continue to develop our services for you. To make them better, more cost-effective, embrace technology to save you time and hassle and make things more secure. To ensure that your money is working harder so you have a greater chance of achieving your goals. We will continue to take care of the little details so you can get on with living life.
This brings me to the other point that struck me whilst I sat on a beach in Cornwall. The more time I spent worrying about current and past events, the less I enjoyed the moment, the less present I was.
Without getting too deep or philosophical, I have often asked myself “What is my purpose?” “What is the point of all of this?” From a pure biological or scientific basis one could argue it is to simply reproduce. If you are a frog, then that’s great. But we are humans, the most developed and intelligent species on the planet. It’s up to us to find purpose and then design a life around it.
We are not here for long, so why don’t we do something worthwhile and enjoy it while we are here. Although a massive cliché, time really does fly. They are clichés for reasons as they are often true. It doesn’t seem like two minutes ago that my three boys were babies. My eldest Isaac is now 16, starting A-levels and it won’t be long before he is gone.
Someone once said to me me that life was not a rehearsal. You only get one crack at this.
So what is it that I want to do? How do I want to live the rest of my life? What contribution do I want to make? What is my legacy? What do I need to do to ensure that I am fulfilled and happy?
All questions I have been asking myself and questions we can help you answer if you have found yourself asking them too.
As comprehensive, lifestyle financial planners, not only can we facilitate these wider discussions but also help you arrange your finances so you can get on with living your life without the fear of running out of money or your plans getting derailed by events you cannot control.
I’d be really interested to hear if any of you have been thinking along similar lines. If you have, drop me a line or get in touch with your planner.
Life is not a rehearsal.
Chief Executive Officer
The start of the summer holiday season has seen a further easing of lockdown and attempts by the Chancellor Rishi Sunak to boost the leisure sector with the “eat out to help out” initiative. The government is also encouraging workers to get back on public transport and return to the office to increase footfall in cafes, restaurants and bars. However, there is a good deal of evidence to suggest that many will continue working from home, at least until schools reopen in September. We will continue to work from home for the time being but have the position under constant review.Last month I introduced the “Advice Tree” to you and promised to follow up with more details of the work we undertake for you in both the Goals and Money branches. This time, it’s the Goals branch
Financial Goals – In Alice in Wonderland, when Alice asks the Cheshire Cat “Would you tell me, please which way I ought to go from here?” the Cat replies, “That depends a good deal on where you want to go”. It is the same for us – the first stage in achieving your financial goals is to have clarity of what they are. This is a key area of our expertise, and we can help discuss, and agree a detailed and realistic plan for your financial future.
Estate planning – managing the transition of wealth from one generation to the next is a complex area. We have many years’ experience in this area and work closely with other professionals. We can help simplify the issues, meet your objectives and provide the long-term certainty you seek.
Intergenerational and charity planning – student debt and rising house prices have placed huge pressures on the next generation. It is little surprise that parents and grandparents want to help. But what are the most effective and secure routes? How do you gift capital but retain family control? What are the tax implications of gifts or house purchase? We can help with all these questions.
Insurance and trust planning – using trusts, wills, and other strategies we can make sure your money ends up in the hands of the people you want when you want. Poor planning can see up to 40% of your hard-earned savings paid over to HMRC!
Cashflow modelling – most people find it difficult to project investment returns, costs, inflation and income needs into the future – we use powerful tools that will illustrate this for you. Seeing a picture of your future can really put into perspective how your plans are progressing.
Liaising with your accountant/solicitor – our experience of working with accountancy and solicitors’ practices gives a great knowledge of tax and legal matters. Having clear and joined up plans is more effective and helps to provide great peace of mind.
Next time I will cover the Money branch. Until then, I hope that you and your family continue to stay safe.
I am sure you all raised a smile to Steve’s message last week, especially on the headline article from Reuters: ‘Government allows Brothels in Athens to Re-Open’.
On a more serious note this week, the articles I have read from a couple of reputable sources have led with:
Covid-19 is “most severe” global health emergency ever, says WHO director-general
Covid-19 is “easily the most severe” global health emergency the World Health Organization (WHO) has ever declared, said WHO director-general Tedros Adhanom Ghebreyesus during a press briefing today. “Covid-19 has changed our world,” said the director-general, adding that the pandemic “has shown what humans are capable of – both positively and negatively.”
Pandemic is ‘one big wave’, WHO says
The World Health Organisation has warned against complacency about new coronavirus transmission in the northern hemisphere this summer, saying the virus did not behave like influenza that tended to follow seasonal trends.
“People are still thinking about seasons. What we all need to get our heads around is this is a new virus and… this one is behaving differently,” Margaret Harris told a virtual briefing in Geneva, urging vigilance in applying measures to slow transmission that is spreading via mass gatherings.
She also warned against thinking in terms of virus waves, saying: “It’s going to be one big wave. It’s going to go up and down a bit. “The best thing is to flatten it and turn it into just something lapping at your feet.”
Not so amusing, but all be it, it does demonstrate the severity of the situation we now find ourselves in. In our ‘big wave’ planning, as you know we adapted to holding all your annual review meetings via Zoom or by telephone depending on your preference. I know this is not quite the same as a face to face discussion, but it gives us the opportunity to ensure your financial planning goals continue to remain on track and enables us to deal with all of your immediate needs.
I am pleased to report, we are in the process of planning a move to a new office in Bristol. Adapting to the changing requirements of our team, we realised that Vertigo was not quite flexible enough for our needs and ultimately a little too large now that some of our team will continue to work from home. With more of our team either cycling, running, or walking into the office, modern facilities with multiple showers, changing areas, bike parking and on-site catering was required. The good news is the new office is only 5 minutes’ walk from Vertigo and offers great space for us with a wide variety of meeting room choices to cater for our clients who wish to meet us in Bristol. More details will follow as we near the planned moving date of the 5th September.
I hope you all continue to enjoy the UK summer. As always, thank you for your continued support and please stay safe and healthy.
Those of you with little better to do would have noticed that I missed my last slot 4 weeks ago and my Client Email was never completed in late June. I think the lockdown weeks had begun to blur and roll into each other and I obviously lost track of time (or had nothing interesting to say). However, this time round India gave me an ultimatum and a deadline for this week, and I pleased to say that by hitting the latter I avoided the former.
It has been interesting to see how people and businesses are all starting to emerge from Lockdown. I was reflecting on this whilst we grabbed an impromptu trip to the Lakes for a week, the day after the pubs could open. What a joy just to have a change of scene. Foraging for food at the end of the first day we saw that The Yew Tree in Coniston was a little stressed, shall we say, and not coping as well as The Crown Inn round the corner, which had a good system for engaging with their customers with a simple track and trace app and a welcome smile – not a face mask in sight. Being served up a Cumberland sausage and mash with a pint of Cumbria Way after a day on the fells – heaven.
All businesses, including us, are wrestling with ‘how to get back to work’ and ‘what does the new normal’ look like. I do not feed off other people’s woes but an article in Reuters did catch my eye recently and at first, I confess, I did laugh …. and then I could not stop. I paraphrase but the headline was “Government allows Brothels in Athens to Re-Open”. The thrust of the story lay in the trouble that the purveyors of said trade were having with the application of social distancing with their clients, and the problems said clients were having with track and trace, wishing to retain anonymity and not wishing to queue outside keeping a 2 metre spacing – I bet!
One ‘madam’, who owns three establishments, has already returned to profit as she was able to bail out the local football team through a low key sponsorship deal. The players are thrilled that the club has staved off insolvency and will be in a position to compete next season, but are at best ambivalent about wearing a new pink strip with ‘Villa Erotica’ stencilled across their shoulders – I kid you not.
Some businesses may well return to prosperity quickly, and of course, we wish the oldest industry of all our very best, but others will take a while longer, if at all, and there is no hiding the deep seated problems that the world economy faces. Quite what shape the recovery will be – ‘V’ shaped, ‘W’ shaped ‘L’ shaped or ‘Nike swoosh’ shape (whatever that means) or when it will occur remains unknown; however, the world economy will recover because it always does, and it’s our belief that we will look back in years to come on the COVID-19 era in the same way as we look back on the Banking Crisis of 2007/08.
However, there is no doubt there will be continued pain for many businesses and enterprises for some time to come. The contingency planning put in place by our Financial Director is coming into its own this year and that the financial planning process we apply to the development of your financial plan is equally applicable to Brunel i.e. having a rainy day fund to cope with shorter term ruin. By taking the same approach we can retain our fabulous team in full and our longer term plans remain on course.
Our planning and business is only as good as the support that you give us though, and again from me and the Team I wish to take the opportunity to thank you for your continued support and good humour through this crisis.
I hope everyone is keeping safe and well and managing to remain positive. I for one am very much looking forward to taking some time out with the family next week in Cornwall. The past few months have been extremely challenging for everyone and it is easy to forget that we need a break to re-charge the batteries. If you do manage to get away, I hope you have a great time.
In this update, I wanted to share some further developments we are working on for our clients.
One of our core values is that we Care. As a business, we care – about all of us, about how we work together and our environment.
Brunel believes Corporate Social Responsibility is about living the values and principles that govern the way we operate as an organisation and behave as individuals.
Ensuring we sustain safe operations, have a positive and supportive impact on our employees, the communities we work in and the wider environment, and ensuring we continually strive to build the trust and respect of our clients. We recognise the impacts that we make on society, the economy and the planet, and we seek to make a positive difference in the places where we operate.
Many of you will have seen some of the fantastic work our team has done for charity and making a difference in our local community has always been a big part of what we are about. We now have a dedicated team looking at all of this to ensure our impact remains totally positive across all areas of the business and we achieve the high standards we have set ourselves.
We know from our conversations with you, our clients that some of these matters are really important to you too.
One of the biggest themes we are seeing within the investment world is that of ‘sustainable’ investing. You might have seen it referred to as Ethical, SRI (Socially Responsible Investing), ESG (Environmental, Social & Governance) or ‘Impact’ investing but it all fundamentally means the same thing – making a positive impact on our world and the creatures (including humans) in it, through the investments you choose.
I don’t think any reasonable person would argue that this is a good aim.
In the past my only reservations have been what it implies about ‘ordinary’ investing or indeed who’s definition of Ethical, Responsible or Impact we are referring to.
Historically, Ethical investing meant avoiding certain areas you disagree with (negative screening to use the technical term). In recent years people have seen that positively engaging with companies to encourage change has garnered much better results. The reality is that most big investment companies, by their sheer size, command a seat at the table of most big firms to pressure for positive change. Indeed Vanguard, the world’s biggest fund manager, actively engage with boards to deliver good governance and responsible management. But is that enough?
Ethical investing has also previously been seen as a nice idea but one that severely restricts investment choice and gives up financial growth prospects. Time has however shown that neither is true. As demand has increased the range of options has ballooned but also ‘sustainable’ industries are often those in the fastest growth areas and with the greatest long-term potential. A case in point is the impending climate crisis – companies focusing on renewable energy sources certainly have a long and bright future (assuming they get the right technology and source of energy).
While we each may have slightly different definitions of what ethical means to us there is also likely to be a strong overlap of the things that we want to see in the future. The UN have come up with a set of Sustainable Development Goals which many of us will agree are taking us in the right direction:
At IronBright we have decided that the time is right to introduce focused sustainable portfolios as an option for our clients. If you want to find out more, please get in touch with your financial planner.
With best wishes
With thanks to Dan Hiles, Chair of our Investment Committee for his contribution.