A year for a 5-year-old is one fifth (or 20%) of their life so far, but a year to a 50-year-old is one fiftieth of their life (or 2%of it) so it seems to pass ten times faster. After a few minutes googling there are several terms including….'log time’ or ‘neural adaptation.’
Times flies by for everyone and the same is true for the stock markets. At the end of 2021 we were talking about negative interest rates and fast forward 2 years we have seen successive interest rate rises (monetary policy tightening) and now we are potentially at peak interest rate and talk has started about when to expect the first interest rate cut.
Investment returns in 2022 were negative (every asset class experienced a bad year) and whilst we have continued to see volatility, investment returns year to date have been positive and moving in the right direction. It is impossible to predict where the stock market will be tomorrow let alone at the end of 2024 however various market commentators say…….UK Equities are undervalued (based on P/E ratios) others say US Equities with its exposure to tech companies will continue to do well. Fixed Interest as an asset class looks more attractive now interest rates have potentially peaked. What I would say is I agree with all these comments and whilst we could experience another black swan event (COVID, remember that?) there are plenty of positive signs and having a diverse portfolio is important. Remember the stock market is always ahead of the real economy…...meaning it has already priced in a variety of different issues we are facing including higher interest rates and inflation.
As we know Investing is just one aspect of financial planning and pension planning is another key part. We have seen a few changes this year most notably an increase to the pension annual allowance and confirmation the lifetime allowance will be abolished from 6th April2024 (Government are currently proposing a new individual’s lump sum and death benefit allowance but more on this next year).
For any individuals who are not clients reading this please feel free to contact me over the Christmas period and we can arrange a chat in the New Year. Whether you require financial clarity or are keen to maximise tax allowances, we know time does fly by and before we know it another year would have passed us by. For all my existing clients, as always please do not hesitate to contact me if you have any questions but I look forward to catching up with you at our next review meeting.
Now to answer that question. I am sure plenty of you know that one of The Righteous Brothers most famous songs is called Unchained Melody and, in that song, there is a line ‘time goes by so slowly’. Hopefully we can all agree time is relative to the situation we are in……whether it is The Righteous Brothers talking about love or the last 5 minutes of a football game both can feel like an eternity.
