Friday 15th July 2022
We have all seen the unfortunate passing away of Dame Deborah James, all too soon at 40, who will be remembered as the "Bowelbabe" bringing awareness and raising £7 million for cancer charities. Likewise we'd like to remember Jo Thresher one of our clients who passed away just over a year ago and would be 50 next week. Jo worked with a passion to educate individuals about managing money. Jo's legacy lies in not only in the number of people she has educated about money but also her book on managing money What's Your Excuse for Not Being Better with Money?
At our Longleat Seminar we presented on intergenerational planning and how asset prices pre the Covid pandemic were estimated to be 7.6 x the national income compared to 3 x at the beginning of the 1980s. (Intergenerational rapport fair? Resolution Foundation). With such a spiraling gap between wealth and income; the headwinds of inflation and rising interest rates; managing the sheer range of financial product choice whilst avoiding scams it's no wonder a report by the Centre for Social Justice found 24 million people (about half the adult population) don't feel confident about managing money (Prevention is better than cure - The Centre for Social Justice).
Financial education is so important for everyone and in particular our youngsters and a good starting point is Jo's book that you may find of use for your family and a challenge for us is how best we help you with your family about money. As an example, once you get to 21, you generally now have to be offered membership of an Employer's pension scheme via Auto Enrolment. How many people in such schemes understand where the money is invested? We expect not many.
Our investment committee had its quarterly review meeting yesterday and whilst it is with a backdrop of falling values this year and stock market volatility we remain comfortable with our chosen investment managers, with a simple message to maintain your investments and the underlying researched and recommended managers, who we feel are acting sensibly with the current uncertain backdrop. For a good review to the last quarter have a look at recent commentary from one our chosen providers, Brewin Dolphin, by clicking here.
Our own view is that going forward, it seems for central bankers the choice is spiraling inflation or a recession. Both are painful and have consequences but it seems a recession is much more preferable than an ongoing inflation problem as it will help bring long term inflation under control. This seems to be the lesson of the 1970s that so many publications seem to draw parallels to and would bring a positive outlook to investments markets and be more manageable than a long-term increase in inflation, which also hits those who can afford it the least the most. This is why the central banks are raising interest rates so quickly and indeed there are signs of the economy slowing. Commodity prices have fallen with Oil for example now below $100 per barrel. In the USA a recent CNBC report stated that Americans are canceling deals to buy homes at the highest rate since the start of Covid Pandemic. In the USA they have 30 year fixed rates mortgages which were 3% at the beginning of the year and doubling to 6% by mid June. (Homebuyers are canceling deals at highest rate since start of Covid (cnbc.com)
It also has to be borne in mind the outlook for the underlying Companies where your money is invested and have they really lost that much value? Take Moderna who's share price has fallen 65% since it's high in September last year yet it's revenue has increased having developed a Covid19 vaccine that uses mRNA technology that can target diseases from Flu to Cancer. Healthcare, like sustainable investments will certainly be a key future theme.
- COVID vaccines prevented 19.8 million deaths during their first year of rollout, according to a new study in The Lancet. The research covered 185 countries and is the first major analysis since the first jab was administered in December 2020. India averted the most deaths at 4.2 million, followed by the US at 1.9 million and Brazil at just over a million.
- One in five councils in the UK have now launched rewilding schemes or are planning to do so. Councils are among the largest landowners in the country, and their participation plays a significant role in the current push to rewild 5% of the land. Not bad for a movement that's only a few years old. Guardian
- The global pipeline of offshore wind has almost doubled in the past 12 months from 429 GW a year ago to 846 GW today. Absolutely staggering growth. China has the biggest pipeline at 98 GW, the UK is in second place at 91 GW (up from 55 GW a year ago) the US is third with 80GW, and Germany is fourth at 57 GW. Renewable UK
Bailey Cook News
We are very pleased to welcome Betty Gregory, who joins our support team and we are sure will be a great asset to us.
It seems more like four weeks than four years that we have just celebrated our birthday, as each day we wake with a slight feeling of disbelief that this is ours and what we have achieved. Ultimately, we know this is down to our clients, and we thank them for their continued support.