Rising inflation, interest rate hikes, and war – the challenges of Q1 2022

First quarter stock market ticker

The beginning of the year has proved to be a bumpy ride for investors to say the least. Factors such as soaring inflation, interest rate hikes, the war in Ukraine and a Zero Covid Policy in China have all contributed to the global market sell-off.

Geopolitical uncertainty

The humanitarian disaster has had a significant bearing on investment markets. The most considerable economic effects so far are the soaring food and energy prices.

Prior to imposed sanctions, Russian exports accounted for:

  • 13% of global crude oil production
  • 17% of natural gas production
  • Almost a tenth of global wheat supplies.

European natural gas prices rose by 15% in February this year. Higher energy prices will continue to fuel higher and more persistent inflation. In turn impacting companies’ profits and eating into household incomes.

An agreed partnership between the European Commission and the US to reduce Europe’s reliance on Russian energy could relieve some of the pressure later this year. Meanwhile, the US will aim to deliver larger shipments of liquefied natural gas to cut the European Union’s dependency on Russian gas by two-thirds this year and end it before 2030.

Inflationary issues

Inflation was inevitable as the globe moved back towards a world we were accustomed to pre-pandemic. Demand for goods and services has rocketed, but the supply of these goods and services has struggled to keep pace with demand. Disrupted supply chains continue to struggle to get back on track.

As it stands, inflation in the UK is running at its highest level for over 30 years and is expected to breach 10% before the end of the year. The inflation picture in the US is not too dissimilar, running at a 40-year high with reported inflation at 8.5% in March.

Policy response

Central banks have shown little let-up in their tightening plans, adding further pressure to financial conditions that have become less accommodating in the face of the situation in Ukraine.

The US Federal Reserve (Fed) and Bank of England (BoE) have both hiked rates three times already this year. The US increased rates by 0.5% in early May, the largest rate hike in the US in two decades with their base rate now running at 1%. The UK base rate is also now at 1%, again the highest it has been in over 13 years.

Meanwhile, the European Central Bank (ECB) struck an aggressive stance by bringing forward the date they expect to end their bond-buying programme. They did this despite Europe’s reliance on Russian energy and the damage to supplies caused by the war.

The ECB followed this news with an announcement that interest rate rises should be expected.

Consumer confidence

The rising cost of living is having a knock-on effect on consumer confidence. Concerns about inflation and the war in Ukraine have driven US consumer confidence to an 11-year low.

A consumer sentiment report from The University of Michigan found that confidence declined in March due to falling real incomes, which recently accelerated as fuel prices rose sharply.

Despite these significant challenges, employment statistics indicate that US businesses remain strong. The unemployment rate fell to 3.8% after firms took on 678,000 workers, far higher than the 400,000 expected, according to the Bureau of Labor Statistics.

Global equities remain at depressed levels having fallen by 13.49% as at the end of April, with sectors such as technology much lower than this. The US NASDAQ tech index has taken a real hammering and finished the period down 21.16%.

While many of the above concerns remain present, they appear to have been priced in by investors and in some areas, oversold.

As we move towards the second half of the year we will have a better understanding of the longer-term environment for inflation, central bank’s policy and the state of peace talks between Russia and Ukraine. As and when these factors become more settled, markets should return to a happier state.

In the meantime, company earnings have continued to reinforce the strength and resilience of certain economies and their underlying companies.

We encourage those with exposure to investment markets to rise above the noise and keep their heads. While selling out of equities might provide some short-term emotional relief, it is patience and discipline that markets reward in the long run.

If you want to ensure that your investment portfolio is ready to perform against unpredictable volatility while aligning with your financial goals and appetite for risk, please get in touch.

Get in touch

Our portfolios are positioned to benefit from long-term economic and investment trends, and we favour areas of the markets that have long-term growth potential with manageable risks.

If you have any questions about your own portfolio or want to find out more about how we can look after and grow your wealth, please don’t hesitate to get in touch. Email us at enquiries@bowmoream.com or call 0203 617 9206.

 

This blog is for general information only and does not constitute advice.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Bowmore Asset Management Ltd is authorised and regulated by the FCA.

The Morning Briefing

Bowmore mentioned in Money Marketing, 11th May 2022 

Bowmore Wealth Group is looking to get back on the acquisition trail as it targets £1bn in assets under management (AUM) by 2025.

Bowmore had to put its acquisition plans on hold during the pandemic as the deal flow dried up as the uncertainty of Covid put may business owners plans on hold.

However, the company is nearing completion of its first post-Covid deal with the acquisition of a small financial planning practice that specialises in dealing with the medical profession.

This is the first of a few in its deal flow, which will kick off its plans to accelerate growth.

Bowmore is set to have around £400m in assets under administration by July this year.

The group plans to accelerate both its organic and external growth. It will seek to add another £300m in assets through acquisitions and an additional £300m organically.

Read more: https://bit.ly/3sssMgI

Bowmore Wealth Group looking to grow through acquisitions as it targets £1bn in AUM by 2025

Mark Incledon, CEO quoted in IFA Magazine, 10th May 2022

“Covid slowed down our plans for acquisitions. However, we’re committed to only merging with, or acquiring businesses that have the right cultural fit. We find that we best assess cultural fit through face-to-face meetings – something Covid didn’t allow much of.”

“Saying that, our desire to only pursue high quality with the right cultural fit means we might lose out on some deals to the big consolidators, but we are very comfortable with that.”

“We know there are lots of IFAs and DFMs out there struggling to get to the next level. Many of these are high quality businesses which have grown to around £100m in AUM, but then find they are being held back by ever rising compliance and other back-office costs. However, they don’t want to become part of the factory style of financial advice that some consolidators offer. Ultimately, this means they will lose their identity as a business and end up offering a lesser service to their clients”

“We provide a fantastic opportunity for these businesses to realise their growth potential and have the evidence to support these claims. Our most recent acquisition saw their assets grow by 40% from £50m to £70m within 24 months, simply by maximising the potential out of the existing client bank.”

“We have a clean, efficient structure built to reflect the investment industry today, with all the infrastructure already in place. By joining us, businesses can get on with financial planning or investment management (or both) – we’ll take care of the rest.”

Read more: https://bit.ly/3yvVIsg

Big hikes on bumpy roads

United States

US markets have recorded their worst start to the year since 1939 with the S&P 500 falling by 13.3% as at the end of April. Investors looking for a bit of respite in early May will have been disappointed this week as all eyes turned to the US Federal Reserve (Fed) who were expected to announce their biggest rate hike in more than 20 years.

On Wednesday, this expectation was met as the Fed moved interest rates 0.5% higher, moving the US base rate to 1.0%. The hike itself was widely expected due to the current levels of inflation which hit 8.5% in March.

As a result US markets actually rallied off the back of the rate hike announcement, registering one of the strongest days since 2020, finishing the session between 3 – 4% up. Jay Powell confirmed that markets should expect rates to continue to rise by 0.5% in the next two meetings – this would take the US base rate to 2%. However, over the next 24 hours investors had more time to reflect and digest comments from the Fed’s Chair.

This dovish outlook caused Wednesday’s gains to be given back at the open on Thursday. The US Tech markets (Nasdaq) registered its biggest decline in one day, falling by 5%. The S&P 500 also declined by 3.5%. This movement reflected downgrades to global growth forecasts, especially the slowdown in China and the impacts of Russia’s invasion in Ukraine.

United Kingdom

The Bank of England (BoE) followed suit on Thursday with the Monetary Policy Committee (MPC) voting to raise rates by a further 0.25% to 1%. The UK base rate is now at its highest level since 2009. In tightening monetary policy, the MPC is trying to tame inflation in the UK. The BoE announced they expect inflation to top 10% in Q4 of 2022 as rising energy prices continue to cause upward pressure on prices. They have warned this could push the UK into recession.

Three members of the MPC voted for a larger rate rise of 0.5%. These members are of the opinion that world momentum would continue to push inflation higher and a larger rate rise was needed to combat the issue. Further rate rises are expected in the coming months.

Whether or not markets will improve as we move towards the seconds half of the year is impossible to know, but investor sentiment has been improving and many believe the darkest moments are now behind us. Given the wider market backdrop (MSCI World Equites are down – 13.85% year to date), portfolios have held up well on a relative basis this year. Positive contributors include our commodity, healthcare, UK large cap and US value holdings.

UK Dividends to hit new records in 2022

Q1 2022 dividends

UK companies paid their shareholders a total of £14.2 billion during the first quarter of this year. This headline total was 24.9% lower than the first quarter of 2021. However, the total is misleading and requires some adjustments. For example, Tesco paid a very large one-off special dividend last year and BHP have departed from the London Stock Exchange and migrated to Australia.

After adjustments, the dividend pay-out was 4.2% higher last quarter than in Q1 2021. The biggest contribution to the increase came from the oil sector, which increased pay-outs by 29% year on year. It follows a rebound in oil and commodity prices which have boosted the energy groups, which are highly represented in the UK stock market.

Mid-sized companies continued to benefit from the post-Covid 19 environment, with dividends rising by 30.5% after many of these enterprises had seen more severe dividend cuts than the companies in the FTSE 100, hence their rebound was stronger.

Record year for dividends?

An industry report estimates that UK companies will pay out approximately £92 billion to shareholders in 2022. The war in Ukraine is not only contributing towards the increase in energy prices, but also for metals pricing. Mining companies made no significant contribution in the first quarter to the overall dividend pay-out but should have a significant impact later in the year. If we exclude special dividends, total distributions for 2022 are expected to be around £85.5 billion; 11.5% higher than in 2021. Additionally, share buybacks are also increasing. According to AJ Bell, the scale of UK buybacks is on course to beat the previous annual record of £35 billion, set in 2018.

The UK stock market has a long tradition of paying higher dividend yields when compared to other developed markets, and as the below chart shows, the gap has been widening.

Source: Refinitiv

April volatility

The last month has seen markets return to volatile ways as global equities have shed 6.3% since the end of March. Global stocks remain under pressure as the conflict in Ukraine wears on, inflationary concerns persist and Covid lockdowns in China pose questions for long term growth. Although we saw a modest rebound for risk assets in March, gains have been given back and more as investors grapple with these ongoing macro concerns.

High levels of inflation have a bearing on the valuations of growing businesses. Investors are weighing the impact of higher borrowing costs, and higher prices in general, on the earnings potential of businesses and how much of their pricing power can be retained. Russia’s war in Ukraine continues to disrupt food and components supply, having a negative impact on costs. This is particularly true for car makers that are currently slowing down their production across Europe.

Since last Friday, the US S&P 500 index has registered two of its three worst trading sessions this year as investors anticipated central banks in the UK and US would raise interest rates again to curb inflation. Federal Reserve chair, Jay Powell, has said a 0.5% interest rate rise was possibly on the cards in May.

Whilst it has been a challenging month, appetite for risk assets can turn quickly when positive progress is seen. Should a de-escalation in the Ukraine conflict or China lockdowns develop, or indeed inflation ease faster than expected, we would expect cautiousness to ease.

IHT receipts show year-on-year rise of £0.7bn

Gill Millen, Managing Director of Bowmore Financial Planning, quoted in IFA Magazine 27th April 2022

“Over the past 13 years, IHT has become a significant income stream for HMRC. What was intended to be a tax only on the truly wealthy has become a general tax on ‘Middle England’ and the next generation.”

“13 years ago £325,000 was a reasonable threshold for IHT. That threshold is no longer fit for purpose and the problem is only getting worse as house prices continue to rise.”

“The Government should look at increasing the threshold in line with inflation to make sure that normal, middle class families are able to pass on wealth without being taxed unnecessarily.”

Read more: https://bit.ly/3MQyn8D

French Election

On Sunday 10th of April, Emmanuel Macron (centre) and Marine Le Pen (far-right) qualified for the second and final run off for the French Presidential election, with 28% and 23% of the votes respectively. The ultra-leftist, Jean-Luc Mélenchon was in third place and was therefore eliminated in the first round. The showdown between both candidates will take place this Sunday. For the third time in 20 years, the far-right has made it to the second round and each time their share of the vote has risen. Nevertheless, we are still expecting a similar result as in the 2017 election, where Macron won 66% to 34%.

First round – a nightmare for the traditional parties

Although only two go forward, it was clear from the first round of voting that three parties emerged as front runners, taking around 73% of the total vote. The rest of them (of which there were nine) are far behind. This highlights the near disappearance of the two historical parties who’ve shared power in France for the past 40 years, the centre-right, Les Républicains, and the centre-left, Parti Socialiste. With each party securing just 4.8% and 1.9% of the vote respectively.

Les Républicains candidate, Valérie Pécresse, who at one stage appeared to have a slim chance of winning the election, had racked up personal debt to the tune of €5 million to cover campaigning costs. Because she failed to secure at least 5% of the vote, the state will not reimburse her campaign expenses, and she has been forced to turn to her members and voters to help cover the shortfall.

Second round – 2017 re-run?

First round results and current polls suggest that Macron is likely to be re-elected on Sunday, although he does not hold the same lead as he did five years ago. On Wednesday, Macron and Le Pen argued for nearly three hours during a televised debate. Yesterday, a poll (post-debate) puts Macron ahead of Le Pen, by 56% to 44%. Macron seemed to have won the debate by exploiting Le Pen’s weakest point, her links to Putin and a loan to her party from a Russian bank in 2014 (helping to finance her 2017 presidential campaign). Macron added that when she talks to Russia, “she is talking to her bankers”.

Source: “Les Echos”, Baromètre Quotidien OpinionWay – Kéa Partners

In other news

In March US inflation hit the 8.5% year-on-year mark, slightly higher than expectations. Interestingly, the month-on-month Consumer Price Index rose by 1.2%, the largest monthly gain since 2005. Markets seemed happy enough that inflation readings were broadly in-line with consensus, reflecting expectations that inflation pressures may be peaking.

UK inflation for March came in much higher at 7.0% year-on-year. Fuel prices were a key driver, as were food prices which rose 5.9%, which represents the highest rise in a decade. The Bank of England is under pressure to continue to hike rates, with the US signalling we could be in for a 0.50% increase in May.

Bowmore Bulletin: Your latest update from the Bowmore team

cyclists in beautiful spring weather

There is much more to report from Bowmore HQ this month. We have been in the press once again; plus, new reports from the Bowmore team’s sporting endeavours.

Bowmore in the press

CEO Mark Incledon in IFA Magazine

Bowmore’s research into the recent 35% increase in Capital Gains Tax (CGT) receipts has been published by IFA Magazine.

Our CEO, Mark Incledon, was quoted saying, “These numbers show how the government has already been targeting CGT for increased tax revenues over the last few years – in particular through a greater tax on entrepreneurs selling their businesses.”

“The concern would be that the government continues to use this route to fill its deficit.”

You can find the full story on the IFA Magazine website.

Jill Ellicott in IFA Magazine and Financial Planning Today

Chartered financial planner Jill Ellicott was quoted this month in IFA Magazine and Financial Planning Today, both of which report that pension sharing orders have jumped by 17% in a year. This increase is reported to have occurred as a result of more divorcees realising the value of their pension, and ensuring they retain this valuable asset upon separating from their spouse.

Speaking to IFA Magazine, Jill says, “While the classic question of ‘who gets the house?’ has long defined the financial aspect of divorce proceedings, it is clear pensions are becoming a hotly contested issue.”

Jill goes on to say, “Working together with a Financial Planner such as myself, [who can] help clients to understand the assets available, and how they may be split, means that you can go to a solicitor with the basis of an agreement, which should save time and money.”

You can read the full IFA Magazine and Financial Planning Today stories online.

In addition to her press accomplishments this month, Jill Ellicott has also achieved sporting success!

Jill is the captain of Bowmore Asset Management’s netball team, who won their game against Krypton on 16 March.

Jill also won the “Player of the Match” award. Congratulations to Jill and the whole team, and good luck in your next game!

Mark and Duncan continue their training for the epic Ride for Precious Lives

As you may have read in previous months, two of the Bowmore team, Mark Millet and Duncan Harvey, are training for a charity bike ride this July.

The Ride for Precious Lives is a 225-mile cycle in aid of Children’s Hospice South West (CHSW), a charity providing invaluable support to seriously ill children and their families.

Mark and Duncan have already battled the winter winds and been tested by illness and are back with another update on how their training is going as we enter the spring months.

Words from Mark Millet

“March has been another month where we’ve had to push ourselves to cover more and more miles.

“Last Saturday we completed just under 50 miles. In the image, you can see our route around the south Cotswold area, with a lovely stop at Sherston for a ‘refuel’ at the pub!

“After a suitable ham, egg and chips, we continued our adventure during the lovely, sunny afternoon.

“While cycling back down the old Fosse Way to Grittleton, you realise what a lovely country we live in. It was nice to get home, though!

“We are planning some shorter midweek rides and extending the distance up to 70 miles at the weekend.

“Fundraising has been excellent, and we have now agreed that Bowmore will match all sponsorships, so please feel free to contribute and monitor the Strava on the JustGiving page.”

An update from Amanda at Children’s Hospice South West

“Final preparations for the Ride for Precious Lives 2022 are well underway.

“Firstly, the route has been finalised! This year’s event will see our cyclists take on an incredible challenge of 225 miles over 3 days, visiting our three hospices across the South West. The ride will start on Friday 8 July at Charlton Farm in Bristol, and end at Little Harbour in St Austell on the Sunday. Friday is an “easy” day with 70 miles, then the next two days will see the cyclists taking on just over 77 miles each day! No small challenge.

“Our team of cyclists are hard at work training and fundraising, and we are hoping to raise £180,000 through the event.

“It’s such an incredible challenge, great fun, but lots of hard work too. Emotions will be up and down as our cyclists go the distance. Mark and Duncan are hoping you will dig deep to support their adventure, just as they will have to dig deep over the weekend to get up those hills!

“All the funds raised will ensure we can continue to be here, supporting families going through the most unimaginable of times however and whenever they need us.”

How you can help raise money for Children’s Hospice South West

If you would like to sponsor Mark and Duncan as they continue training for the Ride for Precious Lives, you can donate via the JustGiving page or use your phone to scan the QR code below.

Bowmore will match any donations made, so any amount you can donate could make a huge difference to seriously ill children and their loved ones.

3 super French wines to sip this spring

two glasses of rosé wine

If you are hotly anticipating the warm weather rolling in this spring, you aren’t alone.

Spring officially began on 21 March and will last until the summer solstice on 21 June. It’s the season of new beginnings: flowers bloom, light evenings return, and many people feel their spirits lift as the warm weather returns.

One thing you might be looking forward to this spring is sipping a delicious glass of wine in your garden or sharing dinner with friends.

If you love indulging in a glass of wine in the evening, you might always be searching for new wines to try. Although drinking should always be done in moderation, enjoying a glass of thoughtfully made and lovingly aged wine is one of life’s great pleasures.

So, here are three French wines to sip this spring, plus, how wine could be more than just an enjoyable accompaniment to an evening meal this year.

3 super French wines to sip this spring

1. Red wine pick: Chateau ‘Lalande-Borie,’ Saint Julien, 2009

If you are searching for a deep, rich red wine to pair with red meat or sip by itself on a sultry evening, Lalande-Borie 2009 should be top of your list.

This beautiful Saint Julien red wine has been aged over 13 years, and is made up of 50% Cabernet Sauvignon, 40% Merlot and 10% Cabernet Franc.

Grown and made in the famous wine province of Saint Julien in Bordeaux, France, Chateau Lalande-Borie 2009 emanates tones of dark fruits and fruit-coated tannins.

Lalande-Borie 2009 is a top-shelf wine that may be reserved for a spring dinner party with family or friends. It can be purchased from most independent wine sellers for approximately £40.

2. White wine pick: Simmonet-Febvre, Chablis Premier Cru Vaillons, 2017

Spring and summer are the ideal seasons for a crisp dry white wine such as this Chablis Chardonnay from iconic wine producer Simmonet-Febvre. Founded in 1840, the house of Simmonet-Febvre has been supplying wine globally for almost two centuries.

This Premier Cru Vaillons 2020 white wine is made from grapes grown on the banks of the Serein River in the Chablis province of southern France. The vineyard’s south-westerly position gives it optimum access to the Mediterranean sun, ripening the grapes to an incomparable deliciousness.

Ideal paired with seafood, salad and fresh greens, you can buy it from Waitrose for £28.99. Reserve it for dinner with friends or enjoy it alone – Simmonet-Febvre’s dry white is not to be missed.

3. Rosé pick: Caves D’Esclans, ‘Whispering Angel,’ Côtes de Provence Rosé, 2019

If you have a penchant for rosé wine, Whispering Angel is a now-famous rosé that has captured the attention of wine enthusiasts all over Europe.

The stunning vineyards of Caves D’Esclans are located in the south-east of France, close to the Swiss border, and adjacent to the Mediterranean coast.

Made by Sacha Lichine, known globally as the “master of rosé,” Whispering Angel combines flavours of apple, pink grapefruit and peach. It can be served with fish and makes a particularly good accompaniment to salmon. Alternatively, enjoy it by itself during a relaxing evening in the garden.

You can buy Whispering Angel from most wine sellers for around £20. Enjoy Whispering Angel with meals or as an aperitif – in any setting, it is a truly classic rosé that will help you unwind and relax in the spring months.

Wine could be a viable investment in 2022

As you may already know, the markets proved volatile in the first quarter of 2022.

If you are assessing your allocations and considering your diversification options, wine could be a viable choice for you this year.

Indeed, wine is an increasingly popular alternative investment – and it’s clear why. According to The Times Money Mentor, the overall value of fine wine rose by 13% in 2020. What’s more, Knight Frank reports that while the markets took a considerable downturn during the Covid-19 pandemic, the value of fine wine remained steady by comparison.

So, as well as a delicious accompaniment to a summer meal, wine could be a potential investment opportunity for you this year.

Remember: the value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

How to achieve financial stability in an uncertain time

man building Jenga tower

We all have goals in life that we consider a priority. For many people, financial stability is the most important objective they hold dear.

Indeed, according to a survey by Canada Life, 7 in 10 Brits consider financial stability to be their number one goal.

Financial stability can, of course, bring many benefits to a person’s life. It might reduce your stress, enable you to provide loved ones with what they need to thrive, and help you retire with peace of mind.

While we all want to achieve financial stability, you could feel concerned about doing so in such an uncertain time. The market has proved volatile in the first quarter of 2022, and the UK’s “cost of living crisis” is creating widespread concern.

So, here are actionable ways to improve your financial stability in an uncertain time.

Focus on what you can control

In a world where we all have access to the news 24 hours a day, it can be easy to fall into a constant state of worry.

When it comes to economic uncertainty, you could feel worried about the spending power of your income or pension in 2022, and whether you will be able to achieve financial stability in the coming years.

Indeed, inflation rose to 7% in March 2022, in line with the rising cost of living in the UK. Plus, energy regulator Ofgem raised their price cap by 54% on 1 April, leaving many concerned about their outgoings in the coming months.

All this could lead you to feel overwhelmed by circumstances beyond your control. If you relate to that feeling, you aren’t alone – a Perkbox study reveals 1 in 4 Brits worries about money every day.

However, by focusing on what you can control, you may find ways to optimise your money that can help stabilise your circumstances.

For example, investing your money by subscribing to a Stocks and Shares ISA that suits your appetite for risk could help your money work harder during an economically uncertain time.

If you are interested in investing during a time of market volatility, read about the benefits of regular investing from the Bowmore archive.

By focusing on what you can control and adjusting how you manage your money, you might feel your financial stress reduce and achieve more financial stability.

If you do feel stressed by the current economic climate in the UK, and how it might affect your financial wellbeing, contact us. We can help.

Figure out what financial stability means for you and your loved ones

It’s easy to be distracted by the achievements of others, but ultimately, financial stability will look different for everyone.

Indeed, figuring out what financial stability means for you is a crucial step, but it is often side-lined in favour of comparative thinking.

Yours and your family’s needs are unique, so take time to work out what you need in order to become financially stable, rather than comparing your circumstances to those of friends or colleagues.

Your financial planner can use cashflow modelling to help determine how much money you need in order to become financially stable, whatever that may mean for you.

Working with a professional can help you save towards your life goals. Cashflow modelling and strategic advice can provide invaluable reassurance about what you can afford now and in the future. Whether you want to give your children financial help, retire comfortably, or simply maintain the lifestyle you’ve come to enjoy, we can help you work towards meeting your goals.

Remember: your circumstances are unique. Working with a professional can give you a bespoke service, ensuring you can gain the peace of mind you deserve in the coming years.

Adjust your emotional relationship to money

Uncertain circumstances can make us stressed, meaning you might prefer not to think about your money altogether.

Although most of us like to think we have a level-headed approach to money, in fact, our financial decisions are often embroiled with emotion.

You could find yourself forming a love-hate relationship with money – you want to hit your savings targets, but the more you think about it, the greater the pressure you place on yourself to achieve a seemingly unachievable goal.

Try this exercise

If you can relate to these feelings, try this exercise: make a long list of all the things your money has afforded you in the past, and what it could bring you in the future.

Think about the opportunities your wealth has provided for those you love most and revisit this list in times of financial stress.

What does this have to do with financial stability? Well, approaching your financial circumstances with a mindset of “I get to do…” rather than “I have to do…” can alter not just the way you think about your money, but what you do with it.

For example, you could feel more motivated to save your target sum each month. It could also help you pay closer attention to your spending habits. This could be helpful if you are often tempted to fritter money away on things that aren’t important to you.

If you’re interested in this subject, read our blog to find more insight on why you should manage your emotions and your money as one.

Get in touch

If you are looking for further financial stability, a financial planner can help review your circumstances. Our professional guidance can help you on your journey to financial freedom, giving you valuable peace of mind as we head through an economically uncertain time.

To speak to a friendly professional, email enquiries@bowmorefp.com or call us on 01275 462 469.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Bowmore Financial Planning Ltd is authorised and regulated by the FCA.