Why Run?

Prices rising, currency falling, stock markets shaking and Bank of England warnings – there can be no doubt that these are worrying times for investors and that can have an impact on the confidence they have in their investments.  So, in an effort to offer some reassurance, let’s take a look at the alternatives:

CASH
It can be tempting to pull money out of investments and place it somewhere that is deemed
safe, visible, and reliable. But, as food prices, fuel and energy rise, that cash is buying less and less, thus lagging behind the costs of living, and in the long term (if not the short), there will be less wealth for you.

BANKS
In a time of rising interest rates, rising inflation, and rising borrowing costs, saving accounts will provide limited benefits.

My clients always benefit from having liquidity in savings accounts to access quickly, which
will benefit those funds.

PROPERTY
A physical asset you can see and touch, which we all understand. However, being a landlord
is not as advantageous as it used to be. Higher interest rates make it more expensive and difficult to lend, fewer costs can be offset against taxable income, higher rates of capital gains tax and now lower exemptions reduce

returns. 

People tend to overlook insurance, bad tenants, no tenants and the time and hassle of property
also brings – “An investment portfolio will never call you in the early hours of the morning
because a pipe has burst”.

INVESTMENT FUNDS
Investment funds, such as those managed by SJP, go up and down.  

It can be highly satisfying when things go right and very worrying when things do not work
out. Investment professionals manage these funds, making decisions based on their
knowledge and experience, and, in the case of SJP, they are globally diversified. Unlike the
examples above, money is not just in one place but can be flexible and agile in its movement.
Let’s look at a hypothetical example to illustrate the above:

If an investment was giving a 5% return for 3 years, then fell to -2% for a year, but then went
back to 5% for a year before continuing to grow, which will have outperformed a steady 3%
interest over the same period of years.

NICHE OPTIONS
Of course, some people invest in fine wine, antiques, or vintage cars, but to my mind, this is
people primarily indulging their passions by making money as an enjoyable bonus. Unless
you are an expert operating on a significant scale to ‘hedge your bets’ this would be a risky
investment strategy for the future. 

Though I appreciate it might require some nerve in the current climate, I still believe, even after looking at the alternatives, that investing in professionally managed funds offers the best
long-term investment opportunities. We are creatures with a fight or flight mechanism, and
doing nothing is hard, but sometimes it is the best thing to do!

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may therefore fall as well as rise. You may get back less than you invested.

An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society, as the value & income may fall and rise.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.