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Time in the market, not timing the market

Investment market swings can be unnerving, but they shouldn’t distract you from staying focused on your financial goals. Periods of market volatility will undoubtedly be unsettling times for most investors.

The risks of incurring losses can make holding investments difficult to bear, with the temptation being to sell out and cut your losses. But volatility is part and parcel of investing.

Day-to-day ups and downs of the markets Rather than focus on the day-to-day ups and downs of the markets, it is far more important to focus on the things you can control. With global markets in the grip of the COVID-19 pandemic, investors have been faced with an impossible dilemma: whether to stay invested or to withdraw to a safe haven.

It is important to remember what really matters: it is ‘time in the market, not timing the market’ that dictates long-term returns.

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Generating income from investments throughout your retirement years

The time has finally come, you’re ready to retire. You’ve worked hard all your working life to save and prepare for your retirement, but how should you approach investing now that you’re no longer earning a salary? When it comes to investing in retirement, even during volatile markets, the right strategy can help make sure your retirement savings last.

For many, the idea of retirement means getting away from the stresses of everyday life. But with living costs rising and interest rates low, retirees still need to think about how they can continue to generate income from their investments throughout their retirement years.

It is not unusual for people to live more than 30 years once retired, due to increased incentives to quit work early and rising life expectancy, which in itself can present a major risk that retirees may outlive their savings. The longer the time spent in retirement, the harder it becomes to be certain about the adequacy of your assets.

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Getting my finances in order

When it comes to making financial decisions, you don’t have to go it alone The coronavirus (COVID-19) pandemic outbreak has affected people in various ways. However, this has undoubtedly been a time for contemplation surrounding our personal finances. Many have taken the new-found time at home to conduct a review of their finances, to assess necessary and unnecessary expenditure. While uncertainty with the job market continues, a tighter grip on finances is key.

Tracking your finances gives you a baseline to help track your progress and helps you to see spending mistakes before they become disastrous personal finance problems. Even if you have a solid financial plan in place, it still needs to be updated regularly to ensure it reflects any life changes. But what should your priorities focus on now? Is it time to turn your attention to your pension, ISA or your mortgage, or something else? Should you be thinking about investing more for your children’s education or putting an estate plan in place? And then there are those previous company pension schemes to review – is it three, four…or was it five? Sound Familiar?

If you’re unsure what diagnosis to give your current money situation, maybe it’s time to consider a financial health check. But where do you start? Read on for hints and tips to assist.

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Too much cash in your business? What options do you have?

Are you comfortable with your business’s current cash deposits? Did you know that a company or LLP has a number of options to choose from? A top priority has to be tax-efficiency, ideally combined with the additional benefits of security, easy access and flexibility. Selecting one that offers everything can be difficult.

The instant access and relatively safe (but modest) returns offered by deposit accounts may be a reasonable default position, but has it become less attractive with falling interest rates and inflation? If you are a business owner you could:

  1. Do nothing
  2. Use high-interest accounts/bonds
  3. Take a loan from the company
  4. Distribute the funds as dividends
  5. Make company pension contributions

But have you considered looking at other investment solutions for your liquid assets?

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