Making the Correct Diagnosis

What happens when you are feeling ill? You go to see your Doctor, right? What happens once you are in the Doctors surgery? A conversation takes place between you and your Doctor during which you tell him/her what is wrong. The Doctor then asks you a number of questions and may perform a number of examinations in an attempt to diagnose the problem.

Imagine what would happen if you decided to tell your Doctor you had a sore throat when in actual fact you had a stomach upset? This is of course, wildly exaggerated but the Doctor would effectively be working blindly and making an accurate diagnosis would be a lottery at best.

This analogy very much applies to Wealth/Financial Planning advice. It is only possible for you to receive the best and most appropriate advice by providing your adviser with as much information about yourself and your circumstances as possible.

We have prepared a “ready reckoner” to help you prepare for your next Wealth/Financial Planning meeting which we hope you will find of assistance.

AWML Quick Note: 1Q2021 in Review

AWML Quick Note: 1Q2021 in Review

Welcome to our first AWML Quick Note, a series of occasional quick research and analysis pieces into current or historical topics affecting today’s financial markets, investments, and what they mean to your money.

Spouses Pension! What Spouses Pension?

Spouses Pension! What Spouses Pension?

A recent review of my own defined pension benefits revealed something very disturbing indeed. Said revelation was that my Wife (and partner of 23 years) is not actually entitled to the usual 50% spouses’ pension in the event of my death.

I am a deferred member of the scheme in question and the scheme rules state very clearly that to meet the definition of “Spouse”, both of the following criteria must be met:

  1. The member had to have been married to the claimant Spouse AND
  2. The member had to have been living at the same address as the claimant Spouse at the time of becoming a deferred member of the scheme

Our situation only met with one of the criteria. This effectively means that in the event of my death, fifteen years of hard earned pension benefits disappear.

Predicting The Future

Predicting The Future

“Between the optimist and the pessimist, the difference is droll. The optimist sees the doughnut; the pessimist the hole!” – Oscar Wilde.

2020… What a year it was! Now that it finally is behind us, the question of what to expect of 2021 grows ever more pressing. As we digest Q1 2021 market outlooks and read through last year’s summary and analysis, we are impressed by how contrasting pundit’s predictions are. Nonetheless, it comes as no surprise given how polarised 2020 was. In 2020:

  • The Chinese economy was expected to grow by 1.9%, and the Shanghai Composite grew by 38%.
  • The American economy was expected to decline by 4.3%, while the S&P500 and the Nasdaq100 grew by 16% and 43%, respectively.
  • The British economy was expected to fall by 9.8%, while the FTSE100 declined by 14%.
  • The American Money Supply (M2) expanded by 25%, to +/19.2Trillion USD, while the US Budget Deficit was expected to be of 3.8Trillion USD in 2020, all while Gold increased by 25%
AIG Improve Their Critical Illness Offering – “Critical Illness Choices”

AIG Improve Their Critical Illness Offering – “Critical Illness Choices”

AIG have recently replaced their old Critical Illness cover with a new and improved version known as Term Assurance with Critical Illness Choices. The goal is the same – to offer cover to customers in the event that themselves or a loved one develops a critical illness; is diagnosed with a terminal illness with a life expectancy of 12 months or less; or passes away.

What is different with the new offering is in the wording of the product name, “choices”. Customers will automatically get the standard cover which will cover them for the core critical illnesses. This is great for those that want a lower cost critical illness cover, but for those that want additional benefits, they can customise their policy to suit their needs and budget. The options available at an additional cost are enhanced critical illness cover, children’s cover, waiver of premium and total permanent disability.

Surviving in a Zero (Negative) Interest Rate Environment

Surviving in a Zero (Negative) Interest Rate Environment

“Risk comes from not knowing what you’re doing” – Warren Buffett

Investing was never easy. As humans, we are naturally risk-averse, and losses hurt us more than we enjoy equivalent-sized gains. You probably did not need to read this to suddenly become aware of it – this is encrypted in our brain and teams of psychologists and economists have gathered plenty of empirical evidence proving it.

This self-defence mechanism has been useful in our collective survival, but prosperity and recognition reward the wise risk-takers, innovators and entrepreneurs. To put it simply: avoiding risks allows us to survive but knowing when to take risks allows us to thrive. What constricts us from taking more potentially rewarding risks? Lack of knowledge – we fear what we do not know!

How Not to Leave Money on the Table

How Not to Leave Money on the Table

Today we’re going to talk an extremely important, yet rarely addressed topic – how do you maximise your retirement income, without substantially increasing the likelihood of depleting your assets? For a long time, finding an answer to this problem could be compared to finding the Holy Grail of financial planning. Worry not, as I might have good news today.

During most of this article, I will avoid diving into the details and technicalities, as my goal while writing this article is for it to be readable by the ‘average individual’ as much as possible. Furthermore, I always thought that the intricacies of financial planning and investing to be more appealing to financial planners, like myself, and that clients like simplicity – the more, the merrier. It’s also worth noting that the only reason why we’ll be using US data is that there’s more information readily available. We’ve done some testing, and the results are pretty reliable across different countries.

From a retiree perspective, I find that their goal is simple, and it usually manifests itself in four simple questions:

  • Do I have enough to retire?
  • How much is enough?
  • Will my income be able to keep up with a rising cost of living (inflation)?
  • If the market were to fall by, say, 30% tomorrow? How would that change my situation?
Coronavirus: What this means for your pension

Coronavirus: What this means for your pension

The world economy is facing a big challenge as the coronavirus outbreak causes a drastic drop in financial markets across the globe. This has a direct impact on pension investments and pension holders may be concerned about the value of their pension fund, and how this may affect their retirement savings.

You may also be asking yourself what the most appropriate course of action is at the moment. Should you continue your regular contributions? Should you take a pause, and wait for all this to be over before resuming your monthly payments? Or should you just keep to cash savings as this pandemic is the perfect example of how volatile financial markets can be when put to the test?

Investment - it's time to start being greedy

Investment - it's time to start being greedy

Whilst it may seem a bizarre time to be thinking about investing money, the words of perhaps the worlds most savvy investor (Mr Warren Buffett) should not be ignored.

For those that have not heard Mr Buffett’s mantra, it goes along the lines of “When others are being greedy, be fearful, when others are being fearful, be greedy”.

The recent collapse in global stock markets brought about by fears of the economic impact of Covid-19, has already provided investors with cash the opportunity to buy into the market at heavily discounted prices.

The crisis is still in it’s early stages and it is reasonable to assume that further investment opportunities will present themselves over the coming, days, weeks and possibly months.

Whilst the utopian situation would be to invest at the bottom of the market, there is one fundamental problem all prospective investors face and that is calling the bottom. It is not possible to predict either the utopian timing or pricing.

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