April is the cruellest month. Well, that’s what TS Eliot said, so I suppose it must be true?
It’s a month that doesn’t always know what it wants to do. Too late to have caught the January up-wave, too early to join the bearish throng that so often gets cold feet in June and July. And cold? Oh gosh, yes. In Britain at least, a miserable east wind that has seemed to embody all the ominous feelings that London has been expressing
about an impending Brexit.
European separatists in Italy, in Austria and in Catalonia are making disconcerting electoral strides. And in America? Aaah, America. That’s another story. Of which anon….
As we headed for press in mid-March, the equity markets were still circling in a very unspring like fashion while bond yields softened disconcertingly. There had to be a reason why America’s rising interest rates and its apparently booming economy hadn’t stopped the dollar from weakening, but nobody seemed to be quite sure what it was. The VIX volatility index was twitching about like Galvani’s frog. It was all pretty inconvenient, considering
that this April marks a radical change in the way that risk capital is treated by the taxman. As the door closes on semi-safe “capital preservation” projects in favour of red-blooded, rooting tooting risk ventures, it’ll be interesting to see how many affluent investors feel that this is the time to take up the challenge?
Out there in the wider world, there’s no getting away from the fact that President Donald Trump’s “modern presidential” style has been rattling the market’s nerves during the last few weeks. Trump’s snap decision to impose protectionist steel and aluminium sanctions on both friend and foe alike, against the advice of almost all his policy experts, has underlined the unpredictability of the situation.
Trump’s decision to adduce a totally spurious “national security interest” before hammering European car manufacturers has raised eyebrows and has raised the real prospect of trade wars. And by sacking his state secretary (foreign minister) Rex Tillerson by means of a Twitter message, Trump has revealed a personal capriciousness and vindictiveness that does nothing to inspire confidence. Which is one thing that we really, really need.
The Income Imperative
However, this month our thoughts at IFA Magazine are focused elsewhere. We’re raising our sights above the smoke-strewn battlefield to survey the far horizon beyond.
This month’s series of features on investing for income includes a look at dividend performance, fund choices, tax issues, blue chips, the wider context of inflation, and the longer-term advantages of a growing income and knowing where that income is coming from. Not to mention the all-important economic background which underpins any investment strategy, and the whole question of how a portfolio should be shaped to meet the client’s life situation – whether before or after retirement. The role of professional advice is crucial to help clients make important investment decisions, which increasingly involve a myriad of complex choices. We make no apology for asking as many questions as we give answers – it’s for you to consider how these elements would affect the individual recommendations you will make to your clients.
There’s such a thing as being able to sleep at night. It’s something that not everybody is managing to do particularly well at the moment. Peace of mind is one of the most important benefits for those clients who have built a long term relationship with their adviser based on trust and know that their situation is regularly reviewed to ensure they stay on track to live the life they want to lead. Helping advisers to consider how that advice is framed in the context of what is happening in the world, is part of what we try to do here at IFA Magazine. Hopefully you find it helpful.
Oh, and what’s the cruellest month for equities? September, by a very long historical chalk. Who’d have thought it?