Oooops! I seem to have inadvertently annoyed our financial advisor. Read here how I managed to do this and, more importantly, whether I have been unwise and should stick to the plan.
A few weeks ago I went for a lunch time stroll with our financial advisor. We talk about life, family and inevitably we get around to discussing the world of finance and what the markets are doing.
Now it’s fair to say our investment returns haven’t been setting the world alight over the last few years. Things have been quite troubled for many people, though I’m sure some will have picked the right fund at the right time and will be laughing all the way to the bank. For the rest of us, I am sure the excuses are all well rehearsed by now by the banks.
So knowing we had some spare cash, we had clocked the Government’s National Savings and Investments offering a 12 month fixed rate bond at 6.2%. Not bad I thought, as secure as it gets. I floated the idea, thinking it would be well received but hadn’t quite anticipated the discussion which followed.
Well, you can imagine the reaction, you can, can’t you? Nevertheless 6.2% is good right now, if only for a year or so. Consequently Rachel and I talked it over decided to plonk some cash into National Savings & Investments.
Besides, the Government needs all the help it can get right now. Things aren’t looking good for the economy or for personal finances with many who are battling against inflation.
Meanwhile, a few weeks ago I heard our old MP giving a talk one evening. He’s a Tory and I was quite surprised at how annoyed he is at the state of things. He was distancing himself from a number of appalling issues which, quite frankly, are entirely the fault of his Conservative Party. Anyway, he did reveal that for every £1 the Government receives in tax, a whopping 11.9% goes straight out as interest. Never mind repaying the national debt, that’s just the interest!
And then there’s the small business we have invested in, a kind of reverse Dragon’s Den. For goodness sake, I do hope our financial advisor doesn’t read this, we haven’t told him. I know what he would say.
So that’s potentially two ways in which I have annoyed our financial adviser. One is a very safe, short term investment and the other is far more risky. Having said all that, it’s important for me to remember that there is a rationale to disciplined investing. Decide on the aim, the strategy to achieve it, the acceptable level of risk and stick to it! Arguably, perhaps that’s better than this airy fairy speculative stuff?
Gosh I really do hope he doesn’t read this!
Footnote – just a few days later I see the NS&I have withdrawn the 6.20% 12 month bond, presumably because they raised enough cash. For now, here is the link to NS&I to see what is being offered – click here
Compared to the performance of the stock market lately, 6.2% with a Government Guarantee to boot had to be worthy of recommendation by all IFAs but, of course, they lose out on their cut when you are able to self-invest. To be fair my adviser has always viewed NS&I holdings as an important part of our investment strategy even if he doesn’t handle them for us.
That’s good to know! Your IFA sounds very pragmatic and balanced, probably just like your ‘balanced’ portfolio.