Whenever you’re putting plans together for a future event, it’s always prudent to think of the potential impediments that could prevent your plan coming to fruition. Sometimes, however, it’s possible for you to overstate the danger of some threats, while at the same time underestimating the impact of potential problems that you should actually be more concerned about. A recent report from the Center for Retirement Research at Boston College, which I read about on the CNBC website, highlights this problem with perception when it comes to planning your financial future. The report correctly identifies three threats to your future financial health: Market volatility Rising inflation Increased longevity. It then goes on to say that many people overestimate the effect... Read More

We are all, to some extent, driven to improve ourselves and our lives. The instinct to earn more money and grow your wealth is perfectly understandable and praiseworthy. It’s a good thing we’re driven to improve our place in life. But problems can arise when those instincts become all-consuming and you become overly focussed on the next acquisition, rather than being able to see the wider picture. In financial terms, that picture should be of your overall financial life plan, rather than a series of short-term purchases. When success is simply defined as the next consumer purchase, it’s easy to become overly stressed and reach the position of never being entirely happy – regardless of your wealth. The correlation between... Read More

In one of my recent newsletter articles, you’d have read about the “paradox of accessibility” – alluding to the fact that massive advances in technology mean that you have a vast amount of information at your fingertips that you don’t really need. In the same article, I also referred to another apparent paradox, or contradiction, which states that often the best thing to do with your investment portfolio is to totally ignore it for extended periods. It set me thinking about other investment contradictions that you should be aware of when it comes to investing your money and planning your financial future. 1. Boring is good, excitement isn’t Index-investing – effectively tracking the performance of either a single stock market... Read More

You’ll have read a lot in my articles over the last couple of years about the importance of having a financial plan in place. It’s vital as you go through your life journey to, hopefully, a rewarding and enjoyable retirement. However, that’s only really half the story. As ex-world heavyweight boxing champion, Mike Tyson, once memorably put it: “Everyone has a plan ‘til they get punched in the mouth!” So, taking my earlier advice a step further, I’d suggest that the real value of financial planning lies in being able to update your plan as necessary, and regularly review it so that it remains fit for purpose. Sometimes your plan could be out of date soon after it’s written A... Read More

Here’s a story I’ve shared with you before, but it bears repeating. At a financial services event a few years ago, an experienced adviser told the round-table discussion I was involved in that he was convinced that the growth in an investment portfolio was in inverse proportion to the number of times the client checked its performance. Clearly, he was exaggerating for effect. But while he didn’t have any empirical evidence supporting that claim, there’s a strong element of truth in what he said. Read on to find out why, often, the best thing to do with your investment portfolio is to ignore it. Markets are volatile by their nature Share prices are based on the performance of individual companies... Read More