June 2020 update: Assessing what's next
5th June 2020
Our key messages this month are:
1. We remain very much open for business. As the lockdown eases we are conscious that the safety of our clients and our colleagues must be the highest priority. Therefore, we are not rushing to re-open the office to the public. We will keep iterating our risk assessment to ensure safe office re-opening in the Summer.
2. Our preference remains to use the telephone and to communicate by your preferred choice of video (Zoom, FaceTime, Microsoft Teams or Skype) if you prefer seeing us, as well as via email, through our Personal Financial Portal (preferred) and the post.
3. We have received some 'document drops' through our letterbox followed by distanced walks on Burnham Esplanade where face to face contact has been beneficial, and will be considering distanced garden meetings during the warmer months as a further option.
4. May saw further rallies in global shares and fixed interest securities. There has been significant progress from market lows around the time of the UK lockdown. For instance, the FTSE 100 has risen 27% since its 2020 low. This supports our view that time in the market generally is the most appropriate strategy. However, the FTSE 100 remains 17% below its 2020 high, reflecting the ongoing economic cost of the pandemic. Both figures to market close 4 June 2020. As usual, we have published our usual monthly commentary to give you a further update.
5. Many clients have found that expenditure has fallen during the pandemic. If cash is building up in the bank, once short-term needs and emergencies are covered, those taking income from their investments and pension funds should consider whether it is appropriate to reduce income. Particularly those taking fixed withdrawals may find the medium to long term sustainability of their capital boosted by reducing regular payments now. Some regular natural income from shares and share based funds will reduce this year owing to dividend cuts, which means that any cash built up now might need to be used to supplement income in the future. Nevertheless those clients reliant on their ongoing natural income will find that the wide diversity of income sources in their portfolio will mitigate some of the impact of dividend cuts.
6. Shorter-term investors such as those who in 2020 have capital requirements that are not known to us or who owing to the circumstances are re-assessing plans such as bringing forward retirement, still need to be in contact with us.
Please make contact if you wish to discuss your situation. We send our ongoing best wishes and look forward to meeting you again soon.