Enable’s independent financial advisors of Bishop’s Stortford know how hard it can be to stay calm in difficult political times. As Hamish McRae of The Mail says “We all have to make practical decisions in our daily lives about work, holidays, our homes and our mortgages, pensions, investments and so on. But we have to plan knowing very little about what might happen in our politics.”
Offering reasons to stay calm he suggests some things in the UK and world economies that we can be reasonably sure about. Firstly “The UK economy is extremely resilient. It is still, despite all the adverse publicity heaped on it, growing reasonably swiftly – over the past year faster than Germany, France or Italy. It is still creating jobs, with unemployment at 3.8 per cent the lowest for 44 years.”
He agrees Sterling is very weak, it is at the bottom of its trading range of the past 30 years but if we take a long view he suggests “UK assets must be in the bargain basement.” “A cheap pound is bad for our holidays abroad, which is why ‘staycations’ are booming, and it increases inflation. But it does help insulate the economy against any downturn.”
Also, we all know that interest rates are the lowest they have ever been and he suggests they are likely to remain low for a while yet. That makes a general property crash more unlikely, though particular markets might find the going tough like high street shops, for example. “Eventually, rates will have to rise,” he says, “but that may not happen for some years, and when they do go up, they may not climb very fast.”
Of course, the old stalwart of financial planning Compound interest remains the same. Saving money and reinvesting the interest on it over the long term has long been the path to personal financial security and it is very likely it will continue to be so. Enable’s IFAS can help you find ways to compound interest on your investments.
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individually tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain.
Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.