Save and invest for the long term

Half of all adults in the UK show signs of financial vulnerability, according to research just published by the Financial Conduct Authority^[1]. But with so much uncertainty in the world – from political upheaval to economic and financial crises – how can savers and investors take control?

The answer, says Nancy Curtin, Chief Investment Officer at Close Brothers Asset Management, is to see the big picture. “Our job is to look at everything, because financial markets are interconnected and global. The challenge is to understand what matters - and what doesn’t,” she says.

Savers and investors need help to make sense of these turbulent times, adds Andy Cumming, Head of Advice at Close Brothers Asset Management. “A good financial adviser will act as your coach,” he says. “They’ll work with you to identify your financial goals, set a path for achieving them, and review the progress you’re making to ensure you stay on track.”

In practice, everyone’s goals are different. But by deciding on your long-term financial priorities – whether it’s funding your children’s education or saving enough to be able to retire early – you can avoid being blown off course by short-term events.

This is important. In the short term, events such as Brexit or the US election result will have an impact on the value of your savings and investments. But trying to second-guess that impact – or even attempting to make a bet on it – rarely pays off. Instead, savers and investors who focus on long-term horizons – at least five to 10 years – fare much better.

Sensible diversification – owning a mix of assets, including shares, bonds and alternative investment such as property – will help protect you over the long-term. When one area of your portfolio is struggling, another part may provide important protection.

It’s never too early or too late to start taking this considered and strategic approach. In fact, the FCA’s research shows two groups are particularly likely to be financially vulnerable: millennials just entering the workforce and older adults coming up to retirement. The imperative for both groups – and everyone else – is to confront these challenges now. By working with a trusted adviser and investing sensibly for the long-term, it’s possible to help overcome the uncertainty and build a portfolio that will aim to fulfil your ambitions.

The value of investments can fall as well as rise and you may get back less than you invested.

Get in touch today to start planning your future or to discuss your long-term financial priorities.

^[1] Understanding the financial lives of UK adults: Findings from the FCA’s Financial Lives Survey 2017, October 2017 https://www.fca.org.uk/publication/research/financial-lives-survey-2017.pdf

*First seen in The Times, 18 November 2017.