IMPORTANT NOTICE Hi and Good Afternoon Investment Performance and Periodic Review Firstly, we trust that you and your family remain in good health and are coping with the impact of the crisis. We are able to provide good news in relation to the actual delivery of the performance of our Risk Model Portfolios. You will be aware that our long term delivery of performance has delivered – where we have also been able to demonstrate that the more recent (1 month to 2 years) performance has likewise been exceptional, which is pleasing to illustrate. We do not want to rest at this point so, given the backdrop of the perceived economic and investment market disconnect, we are taking a pro-active approach to making personal contact (via telephone or video) with all investment clients, which will take a huge effort in a short period of time. No one has a crystal ball so predicting the outcomes of investment markets is simply for fools and wrong. The job of a professional financial adviser/planner is to ensure the plan and products selected and held by investors remain ‘suitable to meet the needs’ of the investor at outset and delivering suitability on an ongoing basis which is what we seek to deliver during this time of crisis. You will know that we communicate with our clients regularly, providing updates in relation to Budget, regulatory and investment views – urging contact from investors if their needs or views change, so we can provide professional advice. Given that the investment markets have delivered strongly since the lows of mid-March with the Nasdaq currently (at the time of writing) only 1% or so off all time highs, our thinking is to be extremely pro-active and carry out reviews and provide a professional view point to investors’ thinking and positioning, ensuring that the investment programme meets our clients’ needs on an ongoing basis. We remind all investors that we require informed engagement in relation to altering asset management structures in writing, so to be clear, we are not clever or lucky enough to make predictions or calls on market movements, but we certainly select the ‘best of breed’ assets to fit into place within our portfolios on an independent basis. Our agnostic approach has delivered and we are pleased to confirm that ‘living and breathing’ the delivery of ‘best outcomes’ for our clients adds huge value. Points of Discussion There are a number of Points of Discussion that we should discuss as Adviser to investors which will enable a conclusion to be arrived at, given the impact of the Covid-19 crisis. We know that some investment clients have been ‘required’ to support children and family that was previously unforeseen. We want to make sure that our investment clients are suitably positioned given the backdrop so we would like to reaffirm investors’ risk objectives, focusing on the capacity to suffer investment market volatility/loss, personal investment objectives (goals and aims) and tolerance to risk, which is fresh in the mind, given the recent turmoil. Most commentators consider a disconnect exists between Main Street and Wall Street. Click the link to read a previous article provided to investors: https://www.bestpricefs.co.uk/blog/the-widening-economic-investment-market-gap/ So, with 40 million out of work in the USA and rioting on the streets of many cities, along with a raft of corporate bankruptcies, it’s fair to question how the Nasdaq is only marginally lower than the all time highs of February 21st 2020. Recovery Shape
The question has been – what shape will the economic recovery take? V shape, U shape, W shape, or a tick √ The investment markets have delivered a V shape recovery (to this point) – surpassing expectations as Capital Markets are forward thinking and not always based on the ‘here and now’ of the real economy! What we know…… Click the link to re-read the article published on 29th April 2020 – Investment Market Overview – ‘What we know and what we don’t know!’: https://www.bestpricefs.co.uk/blog/investment-market-overview-2/ To quote the previously published article – ‘we know that Investment Markets are forward thinking. We ‘know’ that interest rates are at record lows and expected to remain on the floor for some time to come (potentially turning negative?)’. We ‘know’ that the Government in the UK has provided unprecedented financial support for individuals and companies, with most developed nations providing a package of support in different formats. What we don’t know! We don’t know how the Covid-19 pandemic will unfold, so it is impossible to predict the shape of the recovery for sure – but a ‘V’ has certainly developed to this point with the major indices, where out of favour ‘pre Covid’ companies, such as the Airlines and Cruise Lines have rallied strongly over the past week or two. The recovery has broadened across stocks generally on optimism for the positive reopening of the economy transpiring, supported by stimulus. Investment Suitability We think it is therefore a good point in time to task ourselves with a huge effort and make pro-active contact with our investment clients so we can be assured, in a collective sense, of being on the correct track for the future, where the investment objectives remain as currently constructed. The lows of the investment markets are fresh in the minds of investors so this should be a good time to further understand investment psychology. We know and understand that our clients prefer the personal touch and have face to face contact – but given the crisis we ‘can’ carry out reviews at a distance, over the telephone or via video. We know that the multi-nationals are expecting to travel less – instead carrying out video calls, rather than travelling across the Globe for a 3 hour meeting. I am sure with a lot of effort we as a business can provide exceptional support, service and good news to our clients to provide the reassurance that they need. We have prepared a list of simple questions in order to ‘prompt’ your review thinking… So if you could give the questions some thought in readiness for a ‘catch up’ it would be great. These are broken down into factual points and personal views and objectives. Factual points A brief of your current financial position (including income/expenditure and assets/liabilities position). We will discuss your risk views and update any changes required during our catch up. Personal Views and Objectives This would involve a review of your present views and objectives (needs for money!). A focus should be placed on ANY ‘changing financial needs’. We would very much expect some benefit to all investors – providing up to date thinking and a snapshot of the present and leading economic and investment market thinking. We are very much focused on assisting our clients, many of whom are at or in retirement – so we would extend a hand of support, where required, to vulnerable clients who have been supporting our services for decades. If required, we can arrange to speak when a family member is available with you. Please be assured, if you need help outside of financial matters we will do all we can to support our clients, simply get in touch if any help is needed. We want to clearly illustrate the ‘added value’ we provide to our clients, with not only their asset management but Estate and General Financial Planning. We also wish to point out that we are able to offer ‘family linking’ discounts for the main platform we use to effectively manage investment portfolios as an extended family. Prefunded switches and cutting edge investment reports, tracking individual investor’s portfolios and funds with full data analytics are also provided – so the added value delivered with our service can easily be quantified. There is much to discuss so we will commence the review ASAP. Now onto the great information: Performance Tables Risk Model 2 Portfolio volatility 4.25
Portfolio volatility 8.6
Risk Model 4 Portfolio volatility 9.81
Portfolio volatility 9.90
Portfolio volatility 10.75
Portfolio volatility 9.99
Portfolio volatility 10.75
Portfolio volatility 11.20
Portfolio volatility 19.1
As we always state – ‘timing’ investment markets is a risky business (in an environment that creates risk naturally) which is why we quote the importance of staying invested for the long term. But as Warren Buffet’s famous quote states – “Be fearful when others are being greedy and be greedy when others are being fearful”.
Note – our clients are risk profiled so we discuss capacity to suffer loss – joining with an investor’s goals and aims and personal risk tolerance – producing suitable investor outcomes. Our risk adjusted investment portfolios are ‘risk adjusted‘ – seeking to manage volatility so not to be compared with an equity index. We manage full equity portolios for some investment clients – that are diversified in relation to sector and geography – although this type of investment view is not for the faint hearted and must be carried out with investors who are experienced, knowledgeable and aligned to their investment needs and cognisant of extreme investment volatility. Nevertheless, we have the resources and expertise to deliver solutions to investors across the range of investment risk. We will provide a specific ‘Investment Report’ detailing the actual delivery of performance to all investors, rather than a general snapshot, as reviews are carried out. We trust this communication is of benefit so, together, we can ensure that your planning and investment structure remains suitable to meet your needs at this time of crisis. Assuring you of our best and focused attention at all times. Warmest Regards. Richard and the Best Price FS Team |
