From Andy’s desk…
Summer has finally arrived.
I hope this newsletter finds you all well and that you are making plans for your summer holidays and summer adventures.
As the sun has started shining and people are complaining of feeling hot and sticky, we are also hearing lots of economists talking about sticky inflation. Of course, they are not referring to the temperature of inflation, but rather that the inflationary pressures seem to be more persistent than first thought. Unfortunately for all of us this inflationary pressure will dumb down returns until the ever-increasing interest rates in the most recent debt credit cycle start to fall.
So, what is fuelling the inflationary pressure?
Well, top of the list seems to be food inflation, but there are also generally now some well-earned pay increases coming through. Unfortunately, this is then passed on in prices of goods and services. It’s equally true that there have been large worker cost increases in China and in many Third World countries who previously picked up the manufacturing cost for us in the more developed world.
These are just examples, but there are certainly enough pressures to keep inflation at a worrying level for a while yet. This means that the recovery is being pushed back and we need to be patient for longer.
So, what’s the alternatives?
Could we run to cash and try and move into longer term fixed-rate savings? The fly in the appointment for that is that as the good cash rates end, we are likely to find ourselves buying into the market when asset prices have recovered and are much higher.
We could look at property, but the residential property market has its own challenges, and we are certainly seeing some reductions in values over recent weeks. It’s equally true that the government seems to be legislating against landlords. So, as we’ve been saying for the best part of a year now, we are in a situation which requires us to be patient and await recovery.
So, when does recovery look to be likely?
It really does seem that we are now looking at second quarter of 2024 before we will see a sustained opportunity for recovery. This is because this is when we can see inflation finally starting to reduce alongside falling interest rates.
So, what does that mean for the investor today?
Well one thing is for sure, fixed interest investments look relatively cheap. This means that there is potential to add this asset class to your portfolios against the day interest rates start to reduce. But of course, interest rates could go higher, especially if inflation persists. We would though expect in the next five years to see inflation at a lower level than it is today, so fixed interest investment seems to be on the cards as a reasonably good story. There is also pockets of value in the equity markets.
So, if you are feeling like you want to make the best of what seems to be a fairly difficult time, it may be worth talking to your advisor about some satellite investment to try and add value over the medium to long-term. This will not be for everyone, and personally I am sticking with my Wealthlineinvest portfolios. The reason for this is that Henry Wilson, who runs the portfolios, is obviously trading and moving to take advantage of the situation that we can all see.
So that’s all from me from a financial perspective for the summer edition of the newsletter.
In other news we have now successfully moved into the new office in Thorpe Wood (details and pictures below). I look forward to seeing all of you over the next year at the office and I look forward to your feedback on how you find it. We now have six dedicated parking spaces ensuring that you have somewhere to park right outside of the office. We are building three purpose-built meeting rooms on the lower floor just for client use. We also have a kitchen in a cupboard for making client drinks. This is quite quaint, and I’m sure that I will show everybody who can visit the office this kitchen in a cupboard. The debates over the next year around what to go on the walls and where to put furniture will, I am sure keep all the staff entertained. But for now, as the temperature increases, they will delight in the benefit of the air conditioning as I am sure you will be when you visit.
The new office like the old office will be dog friendly or in fact pet friendly if you want to bring any of your family of pets to see us (horses by appointment only!). In due course, we will arrange for water bowls and treats. We have already had one dog visit us from Cornwall so we will have to keep track of our furry visitors and where they travel from.
From me to the team a massive thank you for all the work and effort that was put into us literally moving the whole business in two days without business interruption. Everybody went beyond the call of duty, and I look forward to thanking you all properly when we go out for our team day at Newmarket races later this month.
Finally, I’d like to wish you all a wonderful summer and remind you that should you need us for any reason you need only reach out and it will be our pleasure to help you.
We would like to take this opportunity to welcome and introduce our newest Financial Advisor, Sabrina Wright.
Sabrina has over 18 years experience in the Financial Services Industry and joined our family from the Retail Banking Sector. Sabrina is passionate about Financial Education and cutting out the ‘jargon’ to make financial planning easier, more understandable and inclusive for everyone.
Sabrina is very family orientated and enjoys days out and spending time with her young daughter. Sabrina is very creative, enjoys baking at home, travelling and long walks with her Welsh Collie, Cooper.
Charity Golf Day
We recently sponsored the PMGC Rotary Charity Day which raised £4,000 for good causes. Team of Steve Robinson, Miles Green, Arthur Brearley and Joe Jennings.
We are sponsoring a Guide Dog called Grace, she is all grown up now and not a small puppy anymore! Here she is on the left.
Teddy Grace has been on a few adventures over the last few months. She has checked out Manchester Cathedral, visited the Royal Air Force Museum Cosford and went camping in Wales.