TRUMP, PENSION CHANGES & MARATHON TRAINING
The sun has been out, the temperature is rising and April’s sporting occasions have started. We have a new tax year, upcoming new rules and I have been spending time plodding the streets in preparation for the London Marathon. But we can’t talk about any of those until we talk Trump, Tariffs & the Stock Market.
TRUMP, TARIFFS & TRADE WARS
Our simple message here is hold tight, throughout history events happen that send markets tumbling, they also were then followed by recovery. At the end of the email you will see a graph of the US market over the long term, whilst drops can seem large at the time they are mere blips over the longer term.
When we boil down any market drop, the key is normally “uncertainty”. By that I mean that the new events mean that what was previously expected is not going to happen and that the market needs to reassess. The problem at this point is that nobody knows how, in this case, the tariffs and potential trade wars will develop, whether this will force economies into recession or whether we will just look back at a “storm in a teacup”. When you don’t know this you cannot reassess how you expect individual companies and assets to perform.
To use a completed scenario we can cast our minds back 5 years to March 2020. At this point, markets were in turmoil as the spread of Covid, potential lockdowns & other worse case speculation worried everybody. Key questions such as “what does a lockdown look like?”, “will companies go bust?”, “what will government do to support?” were all yet to be answered. Once they were answered, which in the UK was at the point Boris Johnson announced the first lockdown and as the furlough scheme was announced, the markets were able to settle, reassess and realise the panic had been for a scenario worse than the reality. The market recovered from there.
As always we review our positions and are currently starting to complete our full annual review. The Trump unpredictability factor is likely to be a theme for the next 4 years, but investors will still be invested after he is gone and companies will find ways to adapt to the environment.
OPPORTUNITIES
For those of you who have investments with potentially taxable gains, this may be an excellent time to move to more tax efficient investments as the potential tax has reduced. If you make lump sum contributions to pensions or ISAs, it is now a lot cheaper to get into the market.
TAKING MONEY OUT
On the flip side it is a less ideal time to take money out of investments, if possible, it is one of the reasons we always encourage you to have a good cash buffer. If you need money out then please speak to your adviser about options.
PENSION CHANGES
You may already be aware of the headline changes announced in the October budget, however we are still awaiting the policy detail that will form the basis of our advice in this area. Expectations are this will be published as late as July, of course, once we know more we will speak to you about the individual impact.
Pension funding remains the most tax efficient way to save for retirement and even with the prospective changes, for most people, it is the best way to invest available.
LONDON MARATHON TRAINING
Firstly, many thanks to those of you have supported me & my charity the NSPCC. I really appreciate it. My race number will be 61191 and can be tracked online.
As I plodded around over the last week it occurred to me that running a marathon is a good analogy for what we are going through with Trump. If you take each mile as a year and equate that to your investing journey. The current situation is the first 100 metres, you might still be behind the person who sprinted off in front of you after the first mile or two, but it is highly unlikely they will still be ahead at the finish. Do not worry too much, the current situation will not last forever.
Paul Richardson BA (Hons), FPFS, Cert SMP
Chartered Financial Planner
Head of Financial Planning
Risk Warnings
The sun has been out, the temperature is rising and April’s sporting occasions have started. We have a new tax year, upcoming new rules and I have been spending time plodding the streets in preparation for the London Marathon. But we can’t talk about any of those until we talk Trump, Tariffs & the Stock Market.
TRUMP, TARIFFS & TRADE WARS
Our simple message here is hold tight, throughout history events happen that send markets tumbling, they also were then followed by recovery. At the end of the email you will see a graph of the US market over the long term, whilst drops can seem large at the time they are mere blips over the longer term.
When we boil down any market drop, the key is normally “uncertainty”. By that I mean that the new events mean that what was previously expected is not going to happen and that the market needs to reassess. The problem at this point is that nobody knows how, in this case, the tariffs and potential trade wars will develop, whether this will force economies into recession or whether we will just look back at a “storm in a teacup”. When you don’t know this you cannot reassess how you expect individual companies and assets to perform.
To use a completed scenario we can cast our minds back 5 years to March 2020. At this point, markets were in turmoil as the spread of Covid, potential lockdowns & other worse case speculation worried everybody. Key questions such as “what does a lockdown look like?”, “will companies go bust?”, “what will government do to support?” were all yet to be answered. Once they were answered, which in the UK was at the point Boris Johnson announced the first lockdown and as the furlough scheme was announced, the markets were able to settle, reassess and realise the panic had been for a scenario worse than the reality. The market recovered from there.
As always we review our positions and are currently starting to complete our full annual review. The Trump unpredictability factor is likely to be a theme for the next 4 years, but investors will still be invested after he is gone and companies will find ways to adapt to the environment.
OPPORTUNITIES
For those of you who have investments with potentially taxable gains, this may be an excellent time to move to more tax efficient investments as the potential tax has reduced. If you make lump sum contributions to pensions or ISAs, it is now a lot cheaper to get into the market.
TAKING MONEY OUT
On the flip side it is a less ideal time to take money out of investments, if possible, it is one of the reasons we always encourage you to have a good cash buffer. If you need money out then please speak to your adviser about options.
PENSION CHANGES
You may already be aware of the headline changes announced in the October budget, however we are still awaiting the policy detail that will form the basis of our advice in this area. Expectations are this will be published as late as July, of course, once we know more we will speak to you about the individual impact.
Pension funding remains the most tax efficient way to save for retirement and even with the prospective changes, for most people, it is the best way to invest available.
LONDON MARATHON TRAINING
Firstly, many thanks to those of you have supported me & my charity the NSPCC. I really appreciate it. My race number will be 61191 and can be tracked online.
As I plodded around over the last week it occurred to me that running a marathon is a good analogy for what we are going through with Trump. If you take each mile as a year and equate that to your investing journey. The current situation is the first 100 metres, you might still be behind the person who sprinted off in front of you after the first mile or two, but it is highly unlikely they will still be ahead at the finish. Do not worry too much, the current situation will not last forever.
Paul Richardson BA (Hons), FPFS, Cert SMP
Chartered Financial Planner
Head of Financial Planning
Risk Warnings
- The value of an investment and the income from it could go down as well as up.
- All investing is subject to risk, including the possible loss of the money you invest.
- Past performance is not a reliable indicator of future results.
- Diversification does not ensure a profit or protect against a loss.
- Please remember that all investments involve some risk. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income
- This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice as at 9th April 2025. You are recommended to seek competent professional advice before taking any action.
