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Difficult times & planning opportunities for investors

By Robbin Davies - Topics: investment diversification, Investment Risk, Investments, Switzerland
This article is published on: 8th April 2020

08.04.20

During this recent period of uncertainty for investors, I thought it might be of help if I gave a few insights as to possible “Safe Havens” for Swiss and neighboring French-domiciledinvestors, together with a personal appraisal of where danger exists, and how to avoid it.

Many of the Swiss insurance companies have brought out innovative savings plans which include capital protection at maturity, often combined with tax-efficient incentives supported by the tax authorities. As you will probably know, each Canton in Switzerland has a slightly different tax treatment, which can however be quite significant, whilst federal regulations are standardised throughout the country. Taking advantage of these concessions is well-worth the time and effort, and at Spectrum we have almost 15 years of experience in advising and helping both new arrivals, and long-term residents.

For all income earners in Switzerland, or those living in nearby France but working in Switzerland, there are tax-efficient solutions with the safety of not only a minimum return, but also, quite frequently, with the flexibility to adjust terms to changing circumstances. Investing or saving is not designed for short-term, and in many ways it is a form of financial disciplinewhich rewards those that “stay the journey”.

The current world-wide Covid-19 virus, once tamed, will very probably change the way the developed world thinks, and works, in the future. Remote working from home will become the norm for certain organisations, reducing pollution, increasing productivity and allowing freedom for commuters to structure their time more efficiently. This demographic change will revolutionise the corporate world.

Why is this relevant to saving and investing? Because by planning ahead, and putting in place the foundation of a portable, secure and viable investment programme it will allow you and your family to have security in the future. It is quite likely that many existing corporations and businesses will merge with current rivals, with there being “safety in numbers”. Others will be bought by better orientated competitors.

Spectrum has access to various insurance-driven products which are able to both protect your assets at the current time, yet also give you a platform for unit-cost averaging when adding in funds in the coming months and years. The payments can be made “ad hoc” – as and when you feel comfortable with the stability of the markets at that time – or can be fed-in on a regular quarterly or semi-annual basis – which smooths the volatility i.e. you no longer have to “time the market”, but instead have “time-in-the-market” working in your favour. Depending on your fiscal status, some of these products can be partially tax-deductible, or tax-deferred, which is the aim and strategy for medium-term investing. Quite clearly not all cases are the same, but we have the experience and knowledge to be able to offer you alternatives to simply leaving your assets in a bank account – currently giving virtually zero interest.

Wishing you good health, keep safe, and we are here to help advise and make suggestions if you would like a personalised interview.

Investments, what should I be doing?

By Philip Oxley - Topics: France, investment diversification, Investment Risk, Investments
This article is published on: 6th April 2020

06.04.20

What’s been happening?
It’s been a very turbulent period over the past few weeks as Coronavirus has taken hold and the impact on the financial markets has been almost unparalleled. Oil is now cheaper per litre than milk or bottled water due to an “oil war” between Russia and Saudi Arabia leading to an oversupply of oil in the markets. In addition, with fewer people on the roads and most airlines grounded, storage facilities are believed to be only months, possibly weeks away from full capacity. Some speculate that the price of oil could fall to zero! Those assets deemed to be “safe havens” such as gold have provided some refuge but it is still trading lower today than it was towards the end of February.

Most of the major financial markets experienced falls of c. 30% during the end of February and into March and whilst there has been some recovery, there remains much volatility and it’s not clear yet that the bottom of this dip has been reached.

Meanwhile, every day there is news of companies cutting or suspending dividend payments to shareholders and as I write this the UK’s major lenders have all agreed to scrap pay-outs to shareholders during 2020 (after receiving a strongly worded letter from the Prudential Regulation Authority). The banks are also being asked to scrap bonuses to their executives.

Why? Well, this should provide the banks with a much needed, extra £8bn cushion as they face increased demands to provide financial support to individuals and businesses in the form of loans, mortgage holidays etc.

What should you be doing?
For those who are close to retirement age, I cannot overstate the importance of speaking to your financial advisor during these challenging times. Essentially, the closer you are to needing to draw a pension or access your investments, the bigger the impact this drop in the markets will have for you.

For those of working age with a pension scheme or schemes and/or savings invested in the markets what actions can you take? Fund managers have been working hard to mitigate the extreme movements in the markets and protect the value of the funds they manage, but there is no escaping that a significant “correction” has taken place. For those of you brave enough to look at the value of your pension fund/s, most will be facing a reduction in value in the region of 10-25%.

It is impossible to say that there will not be further falls, however history has shown that pulling your money out now (where this is an option) or re-calibrating your portfolio by moving out of equities and into bonds, gold, cash etc. is rarely the best course of action. Typically, these decisions are taken too late (when many of the falls in value have already taken place) and re-entry into the markets is typically made too late (missing out on some of the gains that will have already taken place). The result of this is to lock in the losses that have taken place. Remember, these are only paper losses at this stage, albeit painful to bear – and it is only once you move out of the assets or remove cash that a loss will be realised. Whilst it takes a steely resolve and not a little anxiety, it is nearly always better to stay invested and ride out the storm.

It is certainly a good time to review the balance of your investments in your pension scheme or Assurance Vie to ensure they still match your risk profile. But be careful about disproportionately moving out of equities at this stage, as this may hinder the growth of your portfolio as the markets return to growth.

What next?
Markets will recover as they have always have (think 2008 Financial Crisis or “Black Monday” in 1987) – it’s simply a case of when and there could be more volatility over the coming months before we see this happen. There are some early signs of green shoots in Asian markets, for example, factory data from China showing a sharp step up in activity in March.

But the news from many European counties and the US is grim. Most developed nations, and many others besides, will experience a sharp and deep recession. The hope remains that the decline in growth will be “V” shaped as opposed to “U” shaped, meaning the recession will be short-lived and the recovery quick and significant. This is not guaranteed however, and the length of the downturn will depend on many factors, perhaps the greatest being the spread and extent of Coronavirus cases over the coming months and the speed and size of response from governments and central banks.

So, is it a good time to invest? Possibly, but with caution and perhaps a “drip-feed” rather than an “all-in” approach. And as always, it’s better to have a financial advisor working alongside you to provide professional guidance in these matters.

Finally
On a personal note, apart from when I am out meeting clients, most of the time I work from home – from the end of our dining room table which is in a quiet room during the day. I occasionally remind my teenage children to be quiet at the times they are at home, particularly if I am on the phone speaking with a client. Yesterday, my 13 year old son, stuck his head around the door and said, “Could you guys keep the noise down please?“ My wife and I were discussing the challenges of on-line food shopping and he was in the next room on a live streamed lesson, so his request was perfectly reasonable. But times have certainly changed!

The coming months are going to be very challenging for us all. We are seeing the consequences of Coronavirus both in terms of the restrictions we all have on our way of life and more devastatingly on the lives lost across so many countries. At this time, the overriding focus for us all must be on the welfare and safety of ourselves, family, friends and neighbours. In addition, on top of these concerns, many people will become stretched financially.

As the French-born Etienne de Grellet said, “I shall pass this way but once; any good that I can do or any kindness I can show to any human being; let me do it now”.

Health before wealth

By Jeremy Ferguson - Topics: Investments, Spain, Stock Markets
This article is published on: 27th March 2020

27.03.20

Never has this expression been more relevant

After we received the news the Lockdown here in Spain is due to be extended until the 12th of April, and my best guess is that could be extended even further if we are on a similar path to Italy. Let’s hope we are not, but I for one am building myself up to accept that’s a real possibility.

My previous articles have spoken a lot about the benefits of living here in Spain: the glorious sunshine, beaches, the associated outdoor lifestyle we all came here to enjoy and the longer life expectancy that comes with all that.

Living in Spain

Wow, how that has all changed in such a short period of time. I have to say how impressed I have been with how the authorities here reacted, in a very timely fashion, and as is typical with the Guardia here in Spain, no messing around! People respect them, and apart from some idiotic panic shopping at the beginning, they are showing a lot of decency towards the authorities and their neighbours.
The UK has reacted in a slightly different way, and I will be intrigued as to the level of intervention the police will take and how that will be received.

My wife and I have both been bed bound for a number of days with many of the virus symptoms, so we are pretty sure we caught the dreaded thing. Considering our age and state of health, together with the difficulty of getting tested, we could see no point in seeking the help of the already stretched hospital services, so we rode it through. The temperatures and headaches, together with muscle aches and sweats were awful, but over in a matter of days. It’s not like we can do anything other than stay at home anyway, so in a strange way, every cloud has a silver lining.

Whilst we are all very worried about the potential health threat, many of us will also be worried about the potential wealth threat as well; I know we certainly are. Our pensions and savings are both taking a big hit at the moment, and I am sure there are a great many of you out there who are feeling the same pain.

Stock market Spain

A bit like the virus though, just as the human body fights back, the economies and companies of the world have an incredible ability to do the same thing. There will be casualties of course, just like with the pandemic, but the ability of the human race to fight back in the face of adversity is quiet incredible.

So rather than worrying too much about the current downturns in investment markets, maybe just trust in mankind’s ability to come back from these things and get back to ‘normal’ as quickly as possible. I cannot even imagine what things must have been like after the end of the second World War, but the human race simply rolled up its sleeves, licked its wounds and eventually got back relatively quickly to economic good health, showing an incredible doggedness and determination in its quest to achieve that.

I am sure this event is going to have a profound effect on people in the future, and how they may act when we come out of this terrible situation. Maybe a lot less will be taken for granted, maybe things will be appreciated more, maybe people will have realised the importance of helping others with selfless acts, maybe the handshake will be a thing of the past.

I do know one thing though, that this will have a profound effect on me going forward.

So my message for both your health and your wealth: stay strong, be careful, look after others around you, and please don’t panic!

Jeremy Ferguson
The Spectrum IFA Group
Sotogrande, 11310, Spain
Office: + 0034 956 794409
Mobile: + 34 670 216 229

jeremy.ferguson@spectrum-ifa.com
www.spectrum-ifa.com

Jeremy Ferguson

Feeling down about investments?

By John Hayward - Topics: Investment Risk, Investments, Spain, Stock Markets
This article is published on: 20th March 2020

20.03.20

Take advantage of this great opportunity

The last stockmarket crash was in September 2008. Here we are again. At the time of writing, the FTSE100 is more than 25% down, even allowing for dividends. For many, this is not an attractive situation when considering investments. For others, the few that look through the dark clouds, this is a great opportunity. It is very difficult, for the vast majority of people, to time when to buy into markets and when to sell out. When to sell can be simpler for those who have a nerve trigger point that will say enough is enough and they will take their profit. Those who sell when things are going down often get it wrong and crystallise a loss. Some will be forced to sell due to other circumstances and could be lucky that this happens when markets are historically high. Others who have to sell at a low point, such as now, are obviously not so lucky. This then leads to a lack of confidence in investing and the feeling of never wanting to be burnt again.

Anybody sitting on cash, wondering what to do with it, should seriously consider investing at a time like this when stockmarkets have crashed. Interest rates are close to non-existent so there is little to offer short term deposit savers. Inflation trundles on and so cash might be ”king” in the short term, but long term hardly ever. The problem is that whenever there is a crisis few can see beyond its end, so they will not invest until things have improved. By then, the potential profits on offer have disappeared. The fact is that that markets will bottom out. Where? Nobody knows for sure, but based on the fact that a big influence on why markets have fallen so much is fear and panic, it is felt that markets are artificially low. There may be further to go down but it is likely that there will be a significant rebound. Markets tend to discount the future. This means that, on the day that someone says the virus is under control, stockmarkets will have already been on their way up for some time.

One way of coping with the uncertainty of when the bottom of this particular dip might be is to drip feed your money into the markets. This means that if markets continue to slide, you don´t suffer a reduced value on all of your cash. Conversely, if markets increase in value, then you are part of that increase. By feeding your money in over a period of time you are able to reduce the downside and be part of the upside. In time, once this crisis has ended, you will already be invested and thus reap the benefits.

To find out how you could make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, contact me today at john.hayward@spectrum-ifa.com or call or WhatsApp 618 204 731.

What to do with investments in a bear market?

By Victoria Lewis - Topics: France, Investments, Stock Markets
This article is published on: 16th March 2020

16.03.20

What a week of political, medical and financial news! Daily market commentary from asset managers, daily messages from my daughter’s school (all students’ temperatures have been taken daily on arrival for the last 2 weeks) and my stock market app has been flashing red, green, red and more red. Let’s see what today brings.

If the stock-market decline triggered by the coronavirus outbreak and the oil price slump is like past drops, there’s both good and bad news.

After a long (largely uninterrupted) run of share price appreciation since 2009, one of the longest bull markets in history, we have now entered a bear market, broadly defined as a 20% drop from recent highs.

Goldman Sachs pointed out that this week that we have never before entered a bear market because of a viral outbreak but that it may be useful to consider the history of bear markets to get a sense of their duration and intensity. There are different types of bear markets which can be described as follows (statistics from GS who analysed bear markets going back to 1835).

Structural bear markets are those created by imbalances and financial bubbles, very often followed by a price shock like deflation. Structural bear markets, on average, experience drops of 57%.

Cyclical bear markets are typically a function of the economic cycle, marked by rising interest rates, impending recessions and falls in profits. Cyclical bear markets experience drops of 31%.

Event driven bear market refers to things like a war, oil price shock or an emerging-market crisis. On average, this type of bear market results in 29% declines. The current crisis is event driven. Monetary response by central banks should be effective but time will tell. However, this is a new territory: an environment of fear where consumers are forced, or just inclined, to stay at home.

The good news is that bear markets triggered by exogenous shocks typically regain their previous levels within 15 months.

Whatever your view is on the markets, my advice is don’t try to predict the future. A recovery is inevitable and we trust professionals to skilfully manage our clients’ funds. We sometimes respond emotionally to stock market decline and volatility, but there is usually no merit in either reacting to, or trying to forecast, short term market events.

Don’t delay your financial plans. For planning, yesterday is better than today, which is better than tomorrow. Contact me, Victoria Lewis, if you want to discuss how you should react to these events.

A flight to safety, or an opportunity for investors?

By David Hattersley - Topics: Investment Risk, Investments, Spain
This article is published on: 13th March 2020

13.03.20

I am as conscious as anybody with regard to the above virus and its potential impact and consequence. A recent financial example would be the demise of Flybe, to which the coronavirus was a contributory factor. Natural animal instincts are fear, driven by fight or flee. So how can one consider investment at such a time, when currently 24 hour news channels and the press are swamping us with a savage feeding frenzy of headline information, with many showing a scant disregard to any in depth analysis and reality.

To clarify some facts, I did some research in the reliable analyses from the UK government, “Surveillance of influenza and other respiratory viruses in the UK” annual reports from 2014-2019. The following fact came to light: deaths in England with a contributory factor from the “flu” have varied from 14,000 to below 10,000 in each “peak season” during this period.

Viruses do mutate and new strains appear. With COVID-19 there is a documented risk for the elderly, in particular, those who may have pre-existing medical conditions, but you need to keep things in perspective.

Investing for the future

A simple phrase from Warren Buffet springs to mind, “When everybody is being greedy, be fearful; when everybody is being fearful, be greedy”.
So how do fund managers cope with this onslaught? How can they take into account all the facts referred to above? We live in a global world which has, nevertheless, regional differences. The multi-asset fund managers that we use have the resources to have access to massive amounts of data, which enables them to take all of this into account.

They invest for the long term, with an eye kept on short term risk. But they avoid short term “knee-jerk” reactions, taking a longer term view based on a minimum 5 year investment analysis and taking a balanced approach

So what’s our role as Financial Advisers? In previous articles I have eluded to each individual’s circumstances. Apart from the pure investment questions, so many other aspects need to be considered for effective financial planning including your personal situation, how much risk you want to take and how long you want to invest for. So a detailed fact find has to be the way forward, and that is carried out by us, not the fund managers. These fact finds are free, and are based on each individual’s requirements and circumstances. So feel free to contact me for a no obligation meeting, apart from the provision of a coffee!

So what is the outlook for 2020?

By John Hayward - Topics: Interest rates, Investment Risk, Investments, Spain
This article is published on: 4th January 2020

04.01.20

How was 2019 for you? For many, it has been another year of uncertainty with an apparent lack of decision making by politicians which has led people to delay making their own decisions. For me, it was the year that I broke my ankle two days into a fortnight holiday. If only for that reason, it has not been my favourite year ever.

So what is the outlook for 2020? Questionable political leadership in the UK over the last 4 years has created a weak economic backdrop where investment firms have been unwilling to risk client money in the UK. That appears to be changing and, whether you agree or disagree with Brexit, certainty creates confidence. A known is far easier to deal with than an unknown.

The current problem is how exactly Brexit is going to go through and how long it will take. That is why top investment firms that we recommend spread their exposure globally and not just in the UK. Although most British people have been hung up about Brexit (me included), the rest of the world has been carrying on their business regardless, creating growth for our clients at a time when other people I have spoken to have been too scared to invest, waiting for that magic day when everything will be at its perfect investment point. This approach is almost guaranteed to fail, certainly in the long term. Taking a grip and making sensible, informed investment decisions now is vital without waiting for a politician to decide your short-term, and long-term, fate.

Since David Cameron announced in February 2016 that there would be a referendum on the UK’s membership of the EU, we have seen the following (to 31/12/19)*:

  • +12% – UK inflation
  • +49% – FTSE100
  • +30% – A low risk investment fund that we recommend for cautious investors
  • +4% – Average savings rate
  • -8% – GBP/EUR exchange rate

What these figures illustrate is that the person who invested, or remained invested, in February 2016, should now be pretty happy. Those who have decided to wait until they know what is happening are likely to have made nothing with their money remaining in a non-interest bearing current account. Their money is now worth 8% less when allowing for inflation. This “loss” is compounded for those living in Spain, receiving regular income from UK State and other pensions, by the fact that the exchange rate is down 8%.

How long do you, or can you, wait before arranging your finances for your benefit and not leaving your money propping up banks that still have issues? We have many satisfied clients who have benefited from our knowledge and expertise. In addition, with our experience of tax in Spain, we can help those living in Spain after Brexit, guiding clients who have UK investments and reducing the impact of the Modelo 720 asset declaration.

Whilst there is a new batch of uncertainty surrounding what Brexit deal will be put in place on 31st January 2020, and what trade agreements will be set up by 31st December 2020, there are positive signs for the coming year and the benefits of these can only be achieved if one is invested appropriately.

We can review your current investments, wherever they may be, and make sure that they are both profitable and tax efficient, both here in Spain and the UK.

*Sources
Hargreaves Lansdown
Financial Express
Swanlowpark

The Changing Financial World

By Alan Watson - Topics: common reporting standards, France, Investments, ISAs
This article is published on: 18th October 2019

18.10.19

It was December 15th 1996; my wife and I were happy to be in Morzine and were enjoying dinner at hotel Les Airelles. Jean-Claude, the owner, was very attentive – we were his only guests! Heavy snow was falling, so the drive back to our home in Le Biot was a slow one, spotting just one other vehicle parked suspiciously in St Jean D’Aulps, the Gendarmes, who looked bemused that a Dutch plated car should mess up the untouched snow cover.

During Christmas I worked as usual in my IFA business covering Europe, but it was a stress free time; international clients had little to bother them, the main concern being market direction. The FCA did not exist; tax people were only after the big fish; even the Financial Ombudsman, for complaints, was years from formation; regulation was unheard of; QROPS transfers were an age away. The Isle of Man, Guernsey, Jersey, and of course Switzerland were the favourite hiding centres. Clients were happy to deposit large sums resulting from their global company contracts. Banks happily took in and paid out in cash, accepted transfers from third parties, and asked minimal questions to new arrivals in the beautiful French Alps; they were simply hungry for this amazing new flow of business. The financial world was a relaxed place, where large sums of “tax free” money could be transferred to the Notaries, who would inform the local land sellers that they had become wealthy; keys were given, dreams were realised and that much expanded supermarket just out of town saw the wine shelves emptying like never before. Travel businesses sprung up with sexy names like, “Utah snow and sun”, and their chalets were full the whole winter. The French tax people started to scratch their heads. Not only were local people driving back and forth through the Swiss border every day, but now a new irritation had arrived in town and some serious checking was necessary. The French Fisc. suddenly had many more employees, serious computer power, and somebody could apparently speak ENGLISH !

It’s now October 2019, my wife and I still love to eat in Morzine, but things have changed. Conversations with my clients all over the Rhone Alpes region take on a very different and focused tone. A global directive of information exchange requirements has shaken up the old world called CRS, “Common Reporting Standard”, which means the UK will exchange all financial, bank account, insurance policy and investment account information with France. Even that renowned haven of Swiss Private Bankers are happy to flood Europe’s tax offices with full financial disclosure information on former residents and clients. If that’s not enough, I regularly hear of clients being pestered by cold calling IFAs based in Paris, the south of France, even Dubai. The pleasure of being seen on social media! But now the approach is somewhat different, we have tight European regulation, or do we?

Making life changing investment decisions is a delicate operation. If somebody tells you they are part of XX group in Gibraltar, but due to “flexible” European financial regulation, they can passport, operate in France – beware: if things go wrong the UK, FCA or French regulator Orias will be unable to help you. A fully regulated French company holds the correct licenses and your chosen adviser should know French rules and regulations, preferably from many years experience in the region. Some individuals choose to keep a leg in the old country, just in case, but this half-half decision could cost you dearly. “Is a UK ISA tax efficient in France?” “My money is 100% Sterling, so impossible to move it over here.”

Your chosen IFA should know a great deal. Test their knowledge on markets, tax issues, currency movements/history, inheritance. Can they introduce you to competent local professionals? Moving from one country to another is a big step. Do make sure all fits into place, you should enjoy this wonderful region for years to come.

How to invest – Multi-asset Funds – Investing Made Simpler

By Emeka Ajogbe - Topics: Belgium, Branch 23 investments, Investment Risk, Investments, multi assets
This article is published on: 16th October 2019

16.10.19

I have spoken about asset allocation and rebalancing and their affect on your investments. An-other strategy that is available to you is multi asset fund management.

You may have heard (read) that I have mentioned that here at The Spectrum IFA Group, we favour the ‘multi asset fund’ route of investing. But, what is that?

MULTI ASSET FUNDS

Multi asset funds provide you with access to multiple funds and asset classes through a single fund, managed and monitored by dedicated experts on your behalf. This type of fund can increase the potential for diversification and help reduce the overall level of risk.

Choosing the right funds and building a diversified portfolio can be extremely difficult. The options available to you are almost limitless, with tens of thousands available to investors in Europe alone.

Generally speaking, it is highly unlikely that a single fund manager is capable of delivering consis-tent outperformance, year on year. Making the right choice for a portfolio and then refining it and rebalancing it over the years takes time, information and skill. Therefore, fund managers need to be monitored to ensure they remain at the top of their game – and replaced when they are not. The resources and/or expertise to do this properly can be time consuming and expensive. There-fore, multi asset funds can play a valuable role in part or all of your investments.

All multi asset funds offer a convenient way to access a wide range of fund managers and asset classes. Spreading investments across a wide range of managers and assets reduces the proba-bility of a fall in value across the whole portfolio.

At the same time, multi asset funds that are designed to target different risk levels make it simple to adapt a portfolio to suit your changing circumstances. For example, if you have no need to ac-cess your savings any time soon, then you are likely to be able to take more risk than clients who are nearing the time when they do need to access their money.

How to invest – Rebalance Your Investments

By Emeka Ajogbe - Topics: Belgium, Branch 23 investments, Investment Risk, Investments, Netherlands
This article is published on: 9th October 2019

09.10.19

I previously discussed how asset allocation is an investment strategy that can limit your exposure to risk. As you get further along your journey of being an investor, you need to understand how to rebalance your portfolio to keep it in line with your investment objectives.

Rebalancing is bringing your portfolio back to your original asset allocation mix. This may be necessary because over time, some of your investments may become out of alignment with your investment objectives. By rebalancing, you will ensure that your portfolio has not become overexposed to one asset class and you will return your portfolio to a comfortable and more acceptable level of risk.

For example, let’s say that your risk tolerance determined that equities should represent 60% of your portfolio. However, after recent market fluctuations, equities now represent 75% of your portfolio. To re-establish your original asset allocation mix, you will either need to sell some of your funds or invest in other asset classes.

There are three ways you can rebalance your portfolio:

1. You can sell investments where your holdings are overexposed and use the proceeds to buy investments for other asset classes. With this strategy, you are essentially taking the profits that you have made and reinvesting it into a more cautious fund.

2. You can buy new investments for other asset categories.

3. If you are continuing to add to your investments, you can alter your contributions so that more goes to the other asset classes until your portfolio is back into balance.

Before we rebalance your portfolio, we would consider whether the method of rebalancing we agree to use would entail transaction fees or tax consequences for you.

Depending on who you speak to, some financial experts advise rebalancing at regular intervals, such as every six or 12 months. Others would recommend rebalancing when your holdings of an asset class increase or decrease more than a certain preset percentage. In either case, rebalancing tends to work best when done on a relatively infrequent basis.

Shifting money away from an asset class when it is doing well in favour of an asset category that is doing poorly may not be easy. But it can be a wise move. By cutting back on current strong performers and adding more under performers, rebalancing forces you to buy low and sell high.

To discuss further how rebalancing can help your existing investments, please contact me either by email emeka.ajogbe@spectrum-ifa.com or phone: +32 494 90 71 72.

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