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Email 1 of 4: Tempo unveils Issue 18 of its product suite Yes, once again, we are splitting details of Tempo’s product suite launch into separate emails, because the stand-out terms and what Tempo is doing continues to deserve special attention. But also once again, before we tell you more about the Tempo plans, we’d like to provide some general points regarding the market backdrop and structured products … Portfolio construction challenges for investors: ‘rocks and hard places’ … > While there have been material gains in some markets recently, at the end of 2019 and first few days of 2020, and there is anticipation of a potential rally , possibly focused on certain sectors which may be beneficiaries of a ‘K’ shaped recovery, coming out of Covid-19, it’s important to remember that the news / outlook for much of the global economy and many major markets wasn’t too bright before Covid-19, and it’s difficult to think that the outlook now is anything other than markedly more challenging. > Despite some recent / current increases in the yield on some areas of fixed income / bonds, bond yields remain at or close to historic lows and swathes of the global bond market is still currently negative yielding, which continues to signal a ‘lower and slower for (much!) longer’ environment. > A low returns environment could present significant portfolio construction challenges for advisers and investors … particularly if portfolio diversification is limited to just active and passive fund management, and asset class and geography. > Clearly, there are various reasons why it seems sensible to consider the possibility that it may be far harder to achieve such strong returns in the decade ahead of us as were achieved in the decade now behind us. > To our minds, optimal portfolio diversification needs to include consideration of different types of investment, which can do different things, for different reasons, in different ways, at different times. This is what diversification is all about: cue including structured products in portfolios! > Structured products can do things which neither active nor passive fund management can do, including being designed to generate positive returns without requiring markets to rise, with a defined deep level of protection if they should fall … and they do it all by contract: offering ‘alpha by contract’, as an alternative and / or complement to alpha by active fund management and / or beta by passive fund management. > Many investors are currently overweight exposure to market risk, including the‘upside risk’ that markets do not rise to the level wanted and needed in the decade ahead of us, as well as the downside risk of losing capital. Structured products can exchange market risk, including the process and performance risk of active fund management, for credit / counterparty risk. > ‘Time in the markets, not timing markets’ is one of the most important learning points for investors, borne out by studies of past crises. The rally seen immediately after 1974, which helped drive the long term returns of the long-term bull market which followed, is a good example. For investors who may have felt inclined to wait a year, until they were more confident to invest, the returns gained over the following years were hugely impacted (more details available, if anyone would like to see them!). Recognising the USPs of structured products: particularly in the current environment … The USPs of structured products (including their ability to generate positive returns without requiring stock markets to rise, with defined levels of protection if stock markets fall, all based on legally binding contracts) are significant and important, particularly at this time. And the comprehensive and granular facts about UK retail structured products’ performance their virtues and merits, and the efficacy of including them in diversified and balanced portfolios. Tempo unveils Issue 18: The Tempo plans: Issue 18 continues to offer exceptional terms … Issue 18 of Tempo’s product suite continues to offer exceptional terms, across each of its 3 plans and 6 options. Tempo’s focus is on ‘deliberately defensive’ products, which means that ALL of its plans and options are designed to increase the likelihood of positive returns being generated, and to decrease the likelihood of capital losses being experienced. Sounds eminently sensible to us … especially at this time …. hopefully to you too! Details for each of the Tempo plans will follow … Three separate emails will follow, providing details for each of the Tempo plans. As always, please see the full plan literature for full details of these plans and the features, terms and conditions, including the risks. The promotion of the plans does not constitute ‘advice’ to invest. Advice is always specific to an individual investor’s circumstances and needs, following the process of ‘know your customer’, with the aim of ensuring that any product is suitable for an investor. Tempo’s products can only be accessed with advice. Demand for Tempo’s plans has been very high recently, resulting in some of our clients missing out on the initial terms on offer, despite moving quickly! If you are interested to invest in any of the Tempo plans in Issue 18 we would certainly suggest early contact, in order to try to ensure availability and access. Please contact us to discuss any aspect of these products. Best Regards. Richard and the Best Price FS Team |