Cherry Reynard

How to get your investments into shape ahead of retirement

Wobbly markets may have given those contemplating retirement pause for thought. In recent years, managing a retirement portfolio has been like falling off a log: as long as the portfolio is invested in financial markets rather than cash, it’s been going up. However, recent volatility suggests this ‘in it to win it’ approach may not be as effective in future.  

Valuation bright spots amid the gloom

These are seat-of-the-pants times for investors. When the global economic and political environment is so fragile that it imperils the pro­fitability of global titans such as Apple and Samsung, it is a time for everyone to take note. The start of 2019 may have brought more realistic stock valuations, but everything from the US/ China trade war to Brexit to the rise of global populism casts a long shadow over ­financial markets.

Have VCTs lost their allure?

In its 2017 Patient Capital Review, the government made its position clear – tax incentives would only be on offer where capital was genuinely at risk. This has seen the venture capital trust (VCT) sector undergo a number of key changes in recent years, designed to steer it towards smaller, higher-risk companies.

How to tackle and profit from volatile markets

Investors in the stockmarket used to recognise that they had to take the rough with the smooth: stockmarkets could be a rocky ride. But investments usually worked out well if they were held for long enough. There has, however, been so much ‘smooth’ in recent years that many investors have forgotten about the ‘rough’ bit. The past year has been an abrupt reminder that stockmarkets are not without risk.

To buy or not to buy: are bonds more work for less return?

For an area that is supposed to be the stable asset, ballast for a portfolio, fixed income has looked pretty rocky in 2018. Ten-year gilt yields have been as low as 1.15% and as high as 1.7%. The corporate bond market has bounced around with increasing unpredictability. If investors needed reminding that this is a new environment for bonds after a lengthy bull run, the past 12 months have provided ample proof.

European funds have struggled this year: will they bounce back in 2019?

At the end of 2017, the IA Europe ex UK sector was the place to be. Having shaken off the rising nationalist threat, shiny new leaders such as Emmanuel Macron looked set to take Europe into a new era. This year, in contrast, has reminded investors that Europe is still, well, Europe: mired in political problems, with growth slowing. The performance of European stock markets has reflected that weakness.

Focus on infrastructure investments: how to build a robust income stream

With interest rates at record lows, infrastructure trusts looked like the perfect solution. Paying an income of around 5 per cent plus, from a portfolio of government-backed assets such as hospitals and schools, they were a good option in an income-thirsty world. The trouble is, everyone else realised it too. The trusts moved to double-digit premiums and started to look unappealingly expensive.

Do volatile stock markets put structured products back in the spotlight?

Reliable income is still an elusive commodity. Interest rates may have moved higher, but savings accounts still don’t beat inflation. This seems to leave investors with an unexciting choice: the stock market, bonds or commercial property, all of which have had lengthy bull runs and are potentially unstable. Structured products, in contrast, remain widely overlooked.