Rebalancing – Do I Really Have to?

Humans have a hard time being investors.  Normally, we like to purchase things when they are cheap and avoid them when they are expensive, but that is often not the case for equities.  We tend to get overly optimistic and enthusiastic when equity markets rise dramatically, as they have done since the Global Financial Crisis a decade ago.  Yet when markets fall materially, we feel bruised and cautious, seeking to hang onto our stable bonds and even selling equities to avoid further falls in portfolio value.  That’s rarely a good idea, especially if you do not need the bulk of your capital in the foreseeable future.

As a client you will know that we have always sought to rebalance your portfolio on a regular basis, by which we mean returning it to the original target allocation that we initially established with you.  Most often, over the past few years, rebalancing has meant selling growth assets (equity-like) and buying defensive assets (bonds) in a contrarian manner.  This has helped to avoid the portfolio becoming dominated, over time, by the riskier growth assets component of the portfolio and to keep you within your emotional tolerance for falls, your financial capacity to weather them and your need to take risk in the first place.

Logically, the reverse also applies; at times like these the proportion of equities in your portfolio will have fallen below their long-term target.  This matters because your portfolio now has too little risk and it will be harder for the growth assets remaining to recoup the falls in value when markets eventually recover.

We can work that idea through with a simple example.  Imagine you own a £10,000 portfolio split 50% (£5,000) into growth assets and 50% into defensive assets.  In the growth assets portion, you own 50 units of a global equity fund priced at £100 per unit.  Growth assets fall by 40%.  Let’s assume your defensive assets are unchanged in value.  You still own 50 global equity fund units, but they are now priced at £60.  Your growth-defensive split has moved from 50/50 to 37.5/62.5.  Time to rebalance.

Figure 1: Market falls leave you underweight growth assets

Rebalancing

Source: Albion Strategic Consulting

Rebalancing i.e. buying equities to realign the portfolio with its allocation target, helps to ensure a quicker recovery back to where you started.  This is because the breakeven price of your equity holdings is now lower.

So, let’s now assume that you rebalance by taking £1,000 from your defensive assets and buying growth assets to get you back to a 50/50 split (left hand grid below).  You can buy 16.7 units at £60 with the £1,000 raised.  To get your portfolio back to its starting value of £10,000 your now 66.7 global equity units need to rise 50% to £90 per unit (middle grid).  However, an un-rebalanced portfolio (right hand grid) only rises to £9,500 with this 50% rise.  In fact, to get back to a portfolio value of £10,000 and un-rebalanced portfolio requires a rise of 67% in the global equity units to £100.

Figure 2: Rebalancing helps the portfolio to recover faster

Rebalancing

Source: Albion Strategic Consulting

Even if the markets fall again after rebalancing, the opportunity exists to rebalance again, likewise further reducing the rate of return required to get back to where you were compared to un-rebalanced portfolios.  That takes courage and discipline, when your emotions are telling you to do the opposite.

The issue of a potential rebalance on the back of large market falls is certainly being considered and don’t be surprised if we raise this with you.  You now know why.  Remember, if you are drawing an income from your portfolio, withdrawing from bonds can get you closer to your target.  Likewise, if you have incoming cashflows, this too can be used to buy growth assets.

As David Swensen, CIO of Yale University’s Endowment and one of the world’s most highly respected institutional investors states[1]:

‘The fundamental purpose of rebalancing lies in controlling risk, not enhancing returns.  Rebalancing trades keep portfolios at long-term policy targets by reversing deviations resulting from asset class performance differentials.  Disciplined rebalancing activity requires a strong stomach and serious staying power.’

Do you really need to rebalance?  The answer for most investors is likely to be ‘yes’ when the time comes.  If we feel a rebalance is necessary, we will be in touch to discuss this with you.

As ever, please feel free to give us a call if you have any questions.

Risk warnings

This article is distributed for educational purposes only and must not be considered to be investment advice or an offer of any security for sale. The reference to any products is made only to make educational points and must, in no circumstances, be deemed to be any form of product recommendation.
This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.

It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

[1]    Swensen, D., (2000) Pioneering Portfolio Management.  New York: The Free Press

Covid-19 Measures: March 2020

The 11 March Budget from the new Chancellor, Rishi Sunak, included £7 billion of expenditure targeting the impact of Covid-19 on employees, the self-employed and businesses. On 17 March a further raft of measures was announced, amounting to an additional £20 billion of support expenditure plus £330 billion of loan guarantees. By 20 March another round of support was announced of such size that no price tag was attached.

 

The Chancellor’s 17 March statement was accompanied by a repeated promise that he would do “whatever it takes” to counter the impact of the virus. Three days later, his second statement gave an indication of how large ‘whatever it takes’ is becoming, with potentially more to come.

 

We have pulled together a round-up of the key announcements so far for businesses and individuals including useful links to government sites.

 

Measures for business

 

Coronavirus Job Retention Scheme (CJRS)

Some form of job support scheme had been expected after the 17 March announcement and the CJRS is similar to schemes that have already been set up elsewhere in Europe. Under the CJRS, “HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month’. In this context ‘furloughed workers’ are non-working employees who are kept on the payroll, rather than being laid off. The employer has to designate these employees and submit relevant information to HMRC via a “new online portal”.

 

Statutory sick pay (SSP)

Businesses with fewer than 250 employees will be refunded the full cost of providing SSP to any employee off work for up to 14 days because of coronavirus.

 

Loan guarantees

A government-backed loan guarantee scheme announced in the Budget has since been twice enhanced.  The Government will now provide loan guarantees up to “an initial” £330 billion for all sizes of businesses:

 

  • For large firms, the Bank of England is launching a Covid Corporate Financing Facility (CCFF), which “will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy”.

 

  • For small and medium sized businesses The loan limit on the Coronavirus Business Interruption Loan Scheme (originally announced in the Budget at £1.2 million) is now £5 million. No interest will be due for the first twelve months and lender-levied fees will be covered. The scheme will be delivered through commercial lenders, backed by the British Business Bank. Eligible SMEs must be UK-based with turnover of not more than £45 million and meet “the other British Business Bank eligibility criteria”.

 

For the period between 20 March 2020 and 30 June 2020, businesses will not be required to make a VAT payment. Instead they will be able to defer this payment until the end of the 2020/21. VAT refunds and reclaims will be paid by the government as normal. No applications will be required as the process will be automatic.

 

For the self-employed, self assessment income tax payments due on the 31 July 2020 (the second payment on account for 2019/20) will be deferred until the 31 January 2021. This also will not require an application. Penalties and interest for late payment will not be charged in the deferral period.

 

Business Rates Retail Discount 

All shops, cinemas, restaurants, music venues and business operating in the leisure and hospitality sectors will have no business rates to pay in 2020/21.

 

On 17 March the Chancellor also promised an additional cash grant of “up to £25,000 per business” to businesses with a rateable value of less than £51,000 – i.e. those that would have benefited from the old version of Business Rates Retail Discount Scheme.

 

Businesses already eligible for small business rates relief

There will be a flat £10,000 cash grant for each business that already benefits from zero or reduced business rates because of small business rate relief.

 

Insurance cover

Although the government has not required the leisure and hospitality businesses to close, on 17 March the Chancellor said that “for those businesses which do have a policy that covers pandemics, the government’s action is sufficient and will allow businesses to make an insurance claim against their policy”. However, pandemic cover is not a feature of most business disruption cover, a point underlined by the Association of British Insurers in a statement it issued on 17 March.

 

Off-payroll working in the private sector (IR35)

Also on 17 March, the Chief Secretary to the Treasury, Steve Barker, said in a statement to the House of Commons that the start date for the new IR35 tax rules would be deferred to 6 April 2021.

 

Time to Pay (TTP)

In the Budget, the Chancellor announced that HMRC would scale up its Time To Pay service, giving businesses and the self-employed the chance to defer tax payments.

 

Government guidance for employers and businesses is here and business support details are here.

 

Measures for individuals

 

Mortgage holidays

For people who find themselves in financial difficulties because of coronavirus, mortgage lenders will offer at least a three-month mortgage holiday.

 

Statutory sick pay (SSP)

SSP is currently paid at the rate of £94.25 a week, rising to £95.85 from April. It is now available to employees from day one, instead of day four, for those who are suffering from the virus or who have been advised to self-isolate. So far there has been no change in the minimum earnings threshold for SSP (£118 a week currently, rising to £120 a week in 2020/21).

 

Individuals ineligible for SSP

Self-employed and gig economy workers generally do not qualify for SSP. Instead they may be entitled to Contributory Employment and Support Allowance.

 

Covid-19 sufferers and self-isolators will be able to claim the benefit from day one instead of day eight. The minimum income floor in Universal Credit (UC) has been temporarily removed to ensure that time off work because of sickness is reflected in benefits.

 

For 12 months from 6 April 2020, the standard allowance in Universal Credit (UC) and the basic element in Working Tax Credit (WTC) for will be increased by the equivalent of about £20 a week over and above planned annual uprating (which were to £323.22 per month for UC for age 25 and over and £1,995 a year for WTC). This effectively brings UC into line with the rate of SSP. The change will apply to all new and existing UC claimants and to existing WTC claimants.

 

Housing benefit

Housing benefit and the housing element of UC will be increased so that the Local Housing Allowance will cover at least 30% of market rents.

 

Hardship Fund

The Chancellor announced in the Budget a £500 million Hardship Fund, which would be distributed to Local Authorities so that they could support the vulnerable.

 

Government guidance for employees is here.

 

On Thursday 26 March, Chancellor Rishi Sunak made his long-awaited statement about the Covid-19 government support scheme for the self-employed, called the Self-employment Income Support Scheme (SEISS). Reports suggest that the announcement had been slow to arrive because of the greater difficulty in structuring and running a scheme that relied on annual information (via tax returns) and could not operate via the PAYE system.
 

Main provisions for the self-employed

 

The main points from the Chancellor’s statement and accompanying press release are:

  • The SEISS will pay a directly payable taxable grant to the self-employed (including members of partnerships) based on 80% of profits averaged over the last three tax years (or shorter periods if self-employment started after 2016/17), subject to a maximum of £2,500 a month. In a recent briefing note from the Institute for Fiscal Studies, it was suggested that the £2,500 figure (which also applies to the employees’ Job Retention Scheme) is the maximum payment that will be made, not the maximum earnings that are protected, i.e. 80% of up to £37,500 of profits ([£37,500 x 80%] /12 = £2,500) will be covered.
  • The initial payment term of the SEISS grant will be “at least three months”.
  • The payment of the grant will not prevent the claimant from continuing to work.
  • The SEISS will be restricted in three ways:
    • Self-employment must provide the majority of the claimant’s income. It is unclear how this is calculated.
    • Trading profits either:
      • are less than £50,000 in 2018/19; or
      • trading profit was less than £50,000 averaged over the three tax years from 2016/17.

 

According to the Chancellor, these thresholds mean the scheme covers 95% of the self-employed. The corollary is that it creates a cliff edge at £50,000, a figure that appears elsewhere in the tax system (e.g. the higher rate tax threshold).

  • The claimant must have submitted a 2019 tax return (covering the 2018/19 tax year). As a concession, any later filer will have four weeks to submit their overdue return if they wish to be included in the scheme.

 

HMRC will use their existing information to assess eligibility and contact individuals directly, requesting completion of “a simple online form”. A gov.uk webpage gives more details, but is somewhat confusingly headed “Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme”. The “don’t call us, we’ll call you” approach is aimed at preventing HMRC being overwhelmed with telephone queries, as has happened with the DWP’s Universal Credit system.

  • Payments from HMRC should start at the beginning of June. The initial sum will represent three months’ cumulative payments. Until then the self-employed can claim Universal Credit. In his statement the Chancellor said Universal Credit could give a self-employed person with a non-working partner and two children, living in the social rented sector, support of up to £1,800 a month.
  • Anyone whose self-employment started after 5 April 2019 and thus has no self-employed earnings recorded with HMRC cannot benefit from the scheme and must rely on Universal Credit.
  • Those who operate through one person companies are not covered by the scheme as, despite the media label often given to them, they are not self-employed. The Treasury press release states that such people “will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes”. The use of the word ‘salary’ is key here, as many one person companies route the bulk of their employee’s remuneration via dividends to reduce National Insurance liabilities.

 

In his closing remarks the Chancellor noted that “…in devising this scheme … it is now much harder to justify the inconsistent contributions between people of different employment statuses”. This was a subtle way of suggesting that National Insurance contributions will have to rise for the self-employed once the crisis is over.

 

Coronavirus Act

 

The day before the Chancellor’s latest statement, the Coronavirus Act 2020 received Royal Assent. This 348-page Act deals with a broad range of Covid-19 related measures (many of which exclude Scotland because of its devolved powers), including:

  • Food supply.
  • Statutory Sick Pay (SSP) modifications, e.g. funding of the employer’s liabilities.
  • Suspension of the complex abatement rules that either reduce or suspend NHS pensions on an individual’s return to work.
  • Uprating of working tax credit.
  • Protection from eviction for residential tenancies to 30 September 2020.
  • Protection from forfeiture for commercial tenancies to 30 June 2020.

 

The explanatory notes for the original Bill (introduced on 19 March ) are here.

Updated government Covid-19 guidance on business support is here and for employees is here.

 

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

Want to Win in Negotiations? You’ll Need These Three Tools

Laid out in this article are the three key tools you need to master in order to win in negotiations.

Over the years we’ve observed that success – in business and in life – often results largely from knowing what skills work extremely well and then practising those skills, a lot.

That seems to be especially true when it comes to negotiating. You can almost always get what you ask for – if, that is you are able to ask the “right” way. And we find that highly successful self-made multimillionaires, high-caliber professionals and other high achievers are typically extremely skilled negotiators.

  • It’s important to understand the full range of issues at play during a negotiation.
  • A mindset that seeks a win-win outcome is ideal.
  • Know your need and how to “read” the other side.

Click the image below to read the full article:

How to Win in Negotiations

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

 

Free Up Your Life: Work Smarter, Not Harder

This article delves into how you can free up your life by working smarter, and unlock the possibilities that come with the extra time available.

168 hours. That’s how much time any of us has to accomplish our tasks and goals each week – at work, at home and out in the world.

Sleep seven hours per night and that window closes to just 119 hours.

  • Streamline how you perform tasks – especially the routine ones.
  • Automate as many steps as you can by removing the human element.
  • Outsource tasks and duties to a virtual assistant.

Click the image below to read the full article:

Free Up Your Life

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

Top Tips for Staying Calm in Today’s Markets

At times like this, it is sometimes worth reminding ourselves that it is this very uncertainty of shorter-term market outcomes that delivers investors with returns above those of placing bank deposits.  This allows us to grow our purchasing power over time.  In the case of equities, this uncertainty can be high as the market adjusts its view of long-term earnings and the discount rate it uses to establish market prices.  If there was no uncertainty, then there would be no equity premium.

Click the image below to read the full article:

Staying calm in today's markets

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

Use the Power of the Pen to Leave a Legacy

This article captures the importance of recording memories, and their impact on those we share them with. Ensuring that you leave a legacy helps to provide inspiration and guidance.

Many of us want to pass along not just their wealth and other assets to our heirs, but also the key lessons we’ve learned throughout our lives. By sharing our stories, we hope to instil important values in our children that they can carry with them on their own journeys.

One creative and highly effective way to do so; Write a book that captures your experience, wisdom and knowledge.

  • Writing a book can help impart your values to heirs and impact their futures positively.
  • An effective book will have candid, honest stories that enlighten and benefit the readers.
  • An outline and a formal writing plan are essential components of a successful book project.

Click the image below to read the full article:

Read Use the Power of the Pen to Leave a Legacy

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

 

Ten Lessons About Dealing with – and Living with – Grief

This article can help us to navigate grief, healthily. It it explores the lives of Tony and Kate Rose who have shared their story in order to guide us through what can be a devastating time.

On July 27, 2015, Tony Rose lost his son. His daughter, Kate, lost her older brother.

Johnny Rose was just 28 years old when he experienced what’s commonly called a “widow-maker” heart attack, which killed him instantly. But at the time of his death, it was far from certain that a natural cause was the culprit. After excelling at school early in life, Johnny had spent several years struggling. By 2015, although he was an attorney, he was unemployed, depressed and living in his father’s pool house. His relationship with his family had reached a crossroads.

As Tony and Kate grieved over time, together and separately, they came to some important conclusions about life and death. About the process of working through a tragedy. And about how to grieve for the past while also living in the moment and for the future.

  • Grief should be accepted – not blocked or denied.
  • Use tools that work for you to deal with your grief.
  • Avoid focusing on what could have been or what you might have done.

Click the image below to read the full article:

Click here to learn more about dealing with grief

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

General Election Outcome December 2019

“One cannot judge a performance in any given field (war, politics, medicine, investments) by the results, but by the costs of the alternative (i.e. if history played out in a different way).”
Nassim Nicholas Taleb – Fooled by Randomness.

For some, waking up to the large Tory majority this morning will be a relief, avoiding the higher taxes for both companies and the better off, and a deeply socialist agenda. Others will feel bitterly disappointed that the seemingly last chance to avoid leaving the EU has probably gone. Whatever your political hue, we are where we are. The political logjam has been unblocked. Many will simply feel relief that the interminable squabbling and stalemate in Westminster is over. Politics is increasingly an unedifying spectacle. Yet democracy – for all its critics – has again delivered something positive. We have seen a greater engagement in the tough issues we face as a nation, the freedom to go to the ballot box and cast our vote for any candidate that we wish and a high turnout of those wishing to voice their opinion. We have each made our own individual contribution to the type of country we want to live in. That is a privilege easily overlooked or taken for granted.

The future, as ever, is uncertain with heightened geopolitical tensions, Trump’s pending
impeachment and the ongoing US trade war with China. Here at home, the challenges of an ageing population, the NHS and social care, negotiating a trade deal with the EU in 2020 and the risks of a potential breakup of the Union are material. Yet these are things largely beyond our control. What we can control though is how our portfolios are structured to deal with whatever is thrown at them by the markets, in response to these ‘known unknowns’ and also any ‘unknown unknowns’ as Donald Rumsfeld, the US Secretary for Defence famously stated.

“A strategy should be judged in terms of its quality and prudence before its outcome is known, not after.”
Berkin & Swedroe – Your complete guide to factor-based investing.

Remember, investing well is simple, but not easy. We remind you of the core pillars of our
approach:

  • markets work pretty well and are hard to beat, so capturing the market return on offer using lower-cost, well-structured products makes good sense;
  • spreading equity exposure broadly across markets, sectors and companies to ensure the risks we face are well-diversified will always sit at the core of a successful long-term strategy;
  • balancing out the risks of equities by owning high-quality bonds provides a good insurance policy against tough times in the equity markets;
  • being patient (living through the short-term falls) and being disciplined (maintaining your philosophy and strategy over time) are fundamental to achieving the returns you need to fulfill your financial goals.

So, whatever happens in 2020 and beyond, try not to worry too much about markets and the uncertainty in the World. You can’t control how the markets behave but rest assured that your portfolio is as strong as it can be to deal with whatever the markets throw at it.

Try to forget about politics, the markets and your portfolio and enjoy the wonderful festive time ahead meeting up with loved ones, friends and simply being grateful that we live in a peaceful, free and affluent democracy. Many in the World are not so lucky.

 

 

Other notes and risk warnings

This article is distributed for educational purposes only and must not be considered to be investment advice or an offer of any security for sale. The reference to any products is made only to make educational points and must, in no circumstances, be deemed to be any form of product recommendation.

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. 

It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

 

 

Stress Testing for Successful Business Owners

As a successful entrepreneur, you’ve probably engaged in business planning to some extent to help you get your company moving in the right direction. But how confident are you that your planning is set up to deliver the results you expect, want and need?

  • A stress test looks for any big gaps between what you aim to achieve as an entrepreneur and the actual results your current strategies are likely to produce.
  • The human element – your unique situations – is a key focal point of effective stress testing.
  • Exit planning, asset protection planning and retirement planning are three major areas that entrepreneurs tend to stress test.

Click the image below to read the full article:

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

Six Traits That May Suggest Your Kid Could Be a Great Entrepreneur

This article highlights the signs and signals that help to indicate your child might have all the traits of a great entrepreneur. You can read more about these key indicators for a great entrepreneur below:

All parents want to see their children achieve success – and that can be particularly true of affluent parents who have enjoyed significant professional and financial success in their own lives. But we know deep down that forcing our kids to be something they’re not equipped to be – pushing them too hard in a direction that’s wrong for them, even it’s where we want them to go – can be a recipe for unhappiness.

Take entrepreneurship. If you’re a business owner, you may have grand plans for one or more of your kids to take over your company someday or start their own venture, just like you did. Of course, your don’t have to be a business owner to have entrepreneurial dreams for your kids. It’s pretty tempting to imagine our offspring as the next Bill Gates or Jeff Bezos.

  • Business ownership is the right path for some but not for others.
  • Be honest about whether your child possesses the traits that are needed for entrepreneurial excellence.
  • Success comes in many forms.

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Discover the six traits of a great entrepreneur, and see if they resonate with your children.

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.