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  • 21 January 2015

    What is the Pensioner Bond?

    Last week saw the launch of Pensioner Bonds from the NS&I. The idea behind them is to give pensioners a higher return on their savings than they are currently achieving in their Bank and Building Society deposits.

    In essence, they are a bond offering 2.8% return for one year and 4% for three years and are available to anyone over the age of 65. You are allowed to invest anything from £500 up to £10,000 per issue of each bond. Be warned though, interest will be paid net of basic rate tax, as the NS&I are not party to the R85 scheme. Also, as with most fixed term products, penalties would be incurred for early withdrawals.

    Prior to the launch, NS&I said they would expect the bonds to be still on sale in the new tax year. However, considering that a staggering £1.153bn (of the £10bn allocation) had already been sold to 110,000 savers in the first two days alone, this now seems unlikely.*

    It is interesting that these have been launched with the election coming up in May. Pensioners make up a large proportion of the voting population, and many have had concerns over savings rates for the last few years (and quite rightly so). Could this be an attempt to pacify voters? I will let you decide…

    *source Daily Telegraph Online

  • It has been just over a month now since we were handed the keys to our first ‘proper’ house… and what a month it has been!

    I (naïvely) assumed that the stress of buying a house was far behind us, but I was definitely wrong. I have no idea how we managed to accumulate so much stuff, but the process of packing, ferrying and unpacking 10 van loads of assorted possessions isn’t something I’d want to repeat in a hurry. Apparently I had my priorities all wrong as the first thing I wanted to sort out were our Christmas decorations – unfortunately these had to wait a few days!

    Braving the world of expenditure sheets…

    I didn’t realise how reckless I could be with money, especially when it came to buying things for the house. I couldn’t seem to go for a pint of milk without being lured into Next for another ‘look round’. I think I could open a shop of my own with the number of photo frames and candle holders that I have accrued over the last few months!

    As we now have a few additional things to pay for such as mortgage protection and house insurance, I thought it would be a good idea to fill out an expenditure sheet to monitor our incomings and outgoings to assist us with the transition (and my impulsive splurges!).

    “It’s surprising how such a simple task can allow you to get a grasp on where your money is going.”

    I’ve never really been very good at budgeting, but it’s surprising how such a simple task can allow you to get a grasp on where your money is going so there aren’t any nasty surprises when you check your bank at the end of the month.

    Filling out the budget planner has even allowed us to realistically budget for our ‘rainy day fund’ and set aside some money for some home/garden improvements in the not too distant future.

    We’re looking forward to having more to put away in our savings pot…

    Looking back I wish I had filled one of these out sooner and got started on our ‘rainy day fund’ a bit earlier but it’s live and learn I guess.

    If I could pass on one piece of advice to you, it would be to fill out one of the attached planners for yourself now. Everybody needs to budget – not just the first-time buyers. You might just surprise yourself at how much that morning coffee (and muffin - but nobody needs to find out about that do they!) on the way to work costs you each month.

    Get on top of your finances now…

    Download our Budget Planner PDF by clicking on the link under ‘downloads’ below. Alternatively, email me if you would like a functional Excel spreadsheet which will do all the hard work and calculate it all for you. It really is that simple!

  • "The year that has just passed was one that managed to confound most expectations.

    It would have been a bold strategist who this time last year, forecast the oil price to halve from $112 per barrel. Yet today, a barrel costs $58.

    Similarly, no one was looking for a significant fall in yields in quality government bonds. There was an almost universal prediction for a gentle rise through 2014; yet the UK 10 year gilt has fallen from a yield of 3% to back under 2%. The story is the same in the US, and Germany has seen even bigger declines due to low inflation in the Eurozone.

    Politics and geopolitics are always hard to predict, but a few of the headlines have been even more outside the box than usual: Russia annexing Crimea; the closeness of the Scottish Referendum vote in the UK; the US recognising Cuba once more; the rise of ISIS in the Middle East...A year like 2014 only serves to illustrate that specific events are very rarely foreseeable, and their impact on financial markets even less so.

    Nevertheless, attempting to identify broad trends in the direction of markets and economies is not a pointless exercise. In the attached note we’ll paint a broad roadmap for the near future, as we see it currently with our “strategic” hat on. Then as investment managers, we can act much as a sat-nav does, adjusting the route as new facts emerge about traffic, tolls and speed cameras."

    Seven Investment Management (7IM)

  • “It’s easy to be negative but, in our view, 2015 presents greater downside risks and the possibility of volatility spikes across all asset classes. This is particularly if Europe is persistently weak and commodity prices remain subdued to the extent that resource-economies such as Brazil cannot contribute positively to global growth. In such an environment, however, diversifiers or hedge fund strategies that benefit from rising volatility can generate higher returns. Political risk will remain particularly high on the agenda in the UK, with the general election on the horizon, and where the outcome could have a significant market impact, be it greater governmental intervention or a referendum on Europe.

    We remain underweight emerging markets, as political risk is high there also as newly elected leaders in Brazil and India must now show they can push through reforms. Overall, we remain constructive on equities, particularly the US, as there are signs that earnings growth can come through to justify further multiple expansions. Whilst interest rates may remain benign in the US and UK, fixed income investors may need to be more tactical in order to generate returns. If inflation falls further, however, real yields will rise and shorter duration assets could act as diversifiers.”

    David Coombs, Head of Multi-Manager Investments, Rathbones

  • 16 December 2014

    The FMB way of working...

    Of late I have acquired several new clients and a discussion with one in particular reminded me of how thorough we are with the things that we do here at FMB.

    During a recent initial meeting, the client could not believe that I did not look through all her investment information which she had brought with her. Instead we sat back and got to know each other over a cup of tea and talked about what was important, including her objectives for her wealth and of course explaining how we work here at FMB including what to expect from us and what we expect from our client.

    She confirmed this was so different to a previous meeting she’d had with another advisor from a building society, who seemed so absorbed by the historic statements that she had brought with her that they hadn’t even questioned the purpose of her visit that day. That ‘uneasy and rushed’ experience led her to the internet to search for another adviser which is where she came across our website.

    For simplification, our process is broken down in to six stages here at FMB and we encourage questions from our clients throughout to ensure that there are no unpleasant surprises; just certainty, clarity and peace of mind.

    We are always grateful for feedback from our clients and to monitor client’s satisfaction with our services, we periodically send out a simple questionnaire. We are confident we do the right thing but it’s nice to be reminded that our ordinary way of working, is found to be, to some, quite extraordinary.

    If you would like to know more about our services or would like a no-obligation initial meeting, please do not hesitate to get in touch.

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