Monthly Archives: June 2020

How would you cope without an income?

Make sure you’re ready should the unexpected happen

Mental health conditions might not be as easy to pin down as physical health conditions, but insurers are increasingly recognising the need to provide cover and support to people suffering with mental ill health. And with mental health behind so many income protection claims, it’s worth reviewing what protection you have in place.

Thinking ahead

How our retirement plans may change in response to the coronavirus pandemic 

The coronavirus (COVID-19) pandemic has touched virtually every aspect of our lives and is having a widespread impact across all aspects of financial life, including retirement plans.

Inflation-proofing your portfolio

One of the biggest threats to the health of your investments

The coronavirus (COVID-19) pandemic has had a dramatic effect on the global economy. Around the world, economic activity has dried up. Fewer consumers are buying and fewer companies are investing.

Risk of retirement longevity

Maximising investment returns over a longer life expectancy

There are lots of variables in retirement. How long people will live for, the costs of goods and services they will need, interest rates available on their accumulated savings, and so on. But once you have retired, investing is anything but straightforward.

Coronavirus Job Retention Scheme

Guaranteeing a proportion of the salaries of millions of workers 

Around the country, many employers have implemented lay-offs due to reduced revenues and the closure of their business premises due to coronavirus (COVID-19). The Coronavirus Job Retention Scheme has been set up to support those employers and help them continue to pay wages of staff who would otherwise have been let go.

Coronavirus Business Interruption Loan Scheme

Lifeline for small and medium-sized enterprises struggling with cash flow

The Coronavirus Business Interruption Loan Scheme (CBILS) is a loan scheme that was announced by the Chancellor, Rishi Sunak, during the 2020 Budget and has been set up to help small and medium-sized enterprises (SMEs) that are struggling with cash flow because of revenues that have been deferred or lost due to the coronavirus (COVID-19) pandemic outbreak. The loans are being offered on generous terms to support SMEs.

Working remotely

10 essential tips how to work from home effectively

Prior to the coronavirus (COVID-19) pandemic outbreak, we might have imagined working from home as the opportunity of sleeping in late, lounging around in our pyjamas, and long leisurely lunches. However, as many of us are now having to work from home, even though this offers a great amount of flexibility, it is still a professional job – and it needs to be treated as such.

As you have likely already discovered, working where you live is not as easy as it sounds, especially if you have other people in the space. So where practical and depending on the individual for many working at home, it is still important to have set hours, a dedicated workspace, avoid home-bound distractions, and actually dressing as if we’re going to work, to help keep our mindset sharp and focused.

Top tips on how to successfully work from home

1. Plan your day

This will help you minimise your distractions and maximise your true productive times. Without supervision, even the most conscientious of us can lose focus. Setting a plan not only provides structure to the day, but it also helps you stay motivated. Start the day as you would if you worked in an office. Get up at the time you would usually wake up. Get dressed, and try to avoid online distractions once you sit down to work. You’ll soon discover the best rhythm for your day. Then set realistic expectations for what you can accomplish on a daily basis. Make a plan and stick to it. Make sure you give yourself permission to have downtime. If you have to work extra hours, give yourself some extra free time later on to compensate.

2. Get organised

Maintaining balance is one of the most difficult aspects of working at home, because the work is always right there staring you in the face. To keep you on track (and not working too much or too little), organisation will be key. Get organised by creating schedules and to-do lists. At the start of each day, spend some time organising your to-do list. Be realistic by setting goals you know you can achieve, and never promise too much. Along with your to-do items, set yourself deadlines to get each one done. For example, if you’ve got a report to write, promise yourself you’ll finish it before lunch, before moving onto the next item.

3. Have a set workspace

If you can, designate a specific place for a home office. Store all work-related files, reference materials, supplies and computer or laptop there. Try not to make it near a bed or a TV. Avoid home distractions, and never underestimate the gravitational pull of the fridge and your comfy bed. Ideally, you should ensure that your office space emulates that of a true work environment.

4. Set office hours

Make sure to create a time slot for each of the day’s activities. This helps with communicating to others when your work-time and down-time is. If you have small children, you may need to schedule your work around their naps and periods of home schooling, so that you can have a good period of time to work uninterrupted.

5. Limit the number of times emails are checked

You might find yourself constantly checking email because you’re worried about being out of the loop. However, while it’s important to stay connected, spending too much time on email might distract you from more important tasks.

6. Turn off all social media accounts

In this social media–driven world, it’s likely that you spend a significant portion of your spare time browsing Twitter, Instagram and Facebook. And because the home is therefore inherently capable of putting you in a social media mindset, it’s important to remove it as a distraction while working. Unless it’s essential for your work, stop checking Facebook, turn off Twitter notifications and avoid the temptation to browse your Instagram feed while working. Again, you can do this by promising yourself some time with them once the work is done.

7. Keeping connected and in touch

If you are now having to work remotely due to the coronavirus pandemic, your employer may already have provided the technology – and the chances are you’re using Zoom, Google Chat, Microsoft Teams and so on. However, if this is not the case and you’re looking for tech to enable you to keep in contact with clients or customers, employees or suppliers, the main tools are Microsoft’s Skype, Google’s Duo and Apple’s FaceTime, the last of which only works on Apple devices. Most phone-based messaging apps, including Signal, WhatsApp and Facebook Messenger, also offer video chat, which can be easier to use.

8. Take micro-breaks

When making your schedule, you might want to consider working in smaller chunks of time, and allowing yourself time to get up from the computer to stretch. This will really help you both physically and mentally. When you take micro-breaks, you’ll likely to be more productive. Get some fresh air if you can. Open your windows to let in as much natural daylight and fresh air as possible.

9. Don’t get distracted

One significant difference between home working and the traditional work environment is the presence of family members. While they may not be there all the time, you’re bound to come into contact with them occasionally while working. Because of this, it’s vital that you set boundaries. Make sure that you are focused on the best and proper use of your time during your work hours. Have the radio or some music on in the background as you might do at work.

10. Maintain a healthy lifestyle

Working at home can lend itself to a sedentary lifestyle, not to mention the close proximity of the kitchen and refrigerator, making weight gain a problem. Make sure to schedule time for exercise, keep healthy nutritional snacks nearby to maintain your concentration levels, and remember to keep yourself hydrated at all times.

How can we help?

For more information, please contact S4 Financial on 01276 34932 or email hello@s4financial.co.uk – we look forward to hearing from you.

Mental health and well-being

Recognising times when we feel down or stressed

Mental health and well-being play a big part in how happy we are in our everyday lives, especially during this difficult time. It includes factors such as an individual’s ability to develop their potential, work productively and creatively, and build strong and positive relationships with others.

It also involves areas of life such as feelings of satisfaction, optimism, self-esteem, having some control over one’s life, having a purpose in life, and a sense of belonging and support. During this coronavirus outbreak, resulting in many of us staying at home or in self-isolation, it’s important to consider how to connect with others during these difficult times.

Maintain relationships

Essential for our mental well-being is maintaining relationships with people we trust. Think about how you can stay in touch with friends and family via the telephone, video calls or social media instead of meeting in person – whether it’s people you normally see often or connecting with old friends.

Help those around you

Think about how you could help those around you – it could make a big difference to them and can make you feel better too. Could you message a friend or family member nearby? Are there community groups that you could join to support others locally? Remember, it’s important to do this in line with guidance on coronavirus (COVID-19) to keep yourself and everyone safe. And try to be accepting of other people’s concerns, worries or behaviours.

Connect with support groups

It is quite common to feel worried, scared or helpless about the current situation. Remember that this is a difficult time for everyone, and sharing how you are feeling and the things you are doing to cope with family and friends can help them too. If you don’t feel able to do that, there are people you can speak to via NHS recommended helplines, or you could find support groups online to connect with.

Physical health impact

Your physical health has a big impact on how you are feeling emotionally and mentally. At times like these, it can be easy to fall into unhealthy patterns of behaviour which in turn can make you feel worse. Try to eat healthy, well-balanced meals, drink enough water, and exercise inside where possible and outside once a day for up to one hour, by following the Government’s guidelines.

Keeping active at home

If you are able to go outside, consider walking or gardening (keeping the recommended two metres from others as outlined in the social distancing guidance). If you are staying at home, you can find free, easy ten-minute workouts from Public Health England or other exercise routines on YouTube and fitness apps. Sport England also has good tips for keeping active at home.

Sleep hygiene practices

Feeling anxious or worried can make it harder to get a good night’s sleep. Good-quality sleep makes a big difference to how you feel mentally and physically, so it’s important to get enough. Try to maintain regular sleeping patterns and keep good sleep hygiene practices – like avoiding screens before bed, cutting back on caffeine and creating a restful environment.

Things you can control

Many people find the news about coronavirus (COVID-19) concerning. However, some people may experience such intense anxiety that it becomes a problem. Try to focus on the things you can control, including where you get information from and actions to make yourself feel better prepared. It is okay to acknowledge some things that are outside of your control right now, but constant repetitive thoughts about the situation which lead you to feel anxious or overwhelmed are not helpful.

Reduce media time

The continuous output of 24-hour news and constant social media updates can make you more worried. If it is affecting you, try to limit the time you spend watching, reading or listening to media coverage of the outbreak. It may help to only check the news at set times or limiting to a couple of checks a day.

Positive new routines

Life is changing for us all for a while. Whether you are staying at home or social distancing, you are likely to see some disruption to your normal routine. Think about how you can adapt and create positive new routines – try to engage in useful activities or meaningful activities such as reading. You might find it helpful to write a plan for your day or your week.

Boost your mood

When you are anxious, lonely or low, you may do things that you usually enjoy less often, or not at all. Focusing on your favourite hobby, learning something new or simply taking time to relax indoors should give you some relief from anxious thoughts and feelings and can boost your mood.

Try something new

If you can’t do the things you normally enjoy because you are staying at home, try to think about how you could adapt them, or try something new. There are lots of free tutorials and courses online, and people are coming up with innovative online solutions like online quizzes and streamed live music concerts.

Control and purpose

Setting goals and achieving them gives a sense of control and purpose – think about things you want or need to do that you can still do at home. It could be watching a film, reading a book or learning something online. Play games, do crossword puzzles, sudokus, jigsaws or drawing and painting. Find something that works for you.

Relax and focus

Taking time to relax and focusing on the present can help with difficult emotions and worries about the future, and can also improve well-being. Relaxation techniques such as meditation can help some people to deal with feelings of anxiety.

Get natural sunlight

If you can, once a day, get outside. Spending time in green spaces can benefit both your mental and physical well-being. If you can’t get outside, you can try to still get these positive effects by spending time with the windows open to let in fresh air and get some natural sunlight, or get out into the garden if you can. Remember that social distancing guidelines enable you to go outside to exercise once a day as long as you keep two metres apart from others who are not members of your household group.

How can we help?

For more information, please contact S4 Financial on 01276 34932 or email hello@s4financial.co.uk – we look forward to hearing from you.

Investment diversification

Investing in an unpredictable world

Diversification is an important part of investing. In practical terms, diversification is holding investments which will react differently to the same market or economic event. Generally speaking, there are four broad asset classes: cash, fixed interest (bonds), property and shares (equities).

Since performance in any one asset class can be unpredictable depending on shifts in the market, investing across several asset classes can provide greater diversification potential. Therefore, if one asset class performs favourably, it can potentially offset another that is performing less favourably, providing more balance to your portfolio when market shifts occur.

Range of assets

One of the most effective ways to manage investment risk is to spread your money across a range of assets that, historically, have tended to perform differently in the same circumstances. This is called ‘diversification’ – reducing the risk of your portfolio by choosing a mix of investments.

In the most general sense, there are many adages: ‘Don’t put all of your eggs in one basket’, ‘Buy low, sell high’, and, ‘Bears and bulls make money, but pigs get slaughtered’. While that sentiment certainly captures the essence of the issue, it provides little guidance on the practical implications of the role that diversification plays in a portfolio. And, ultimately, there is no such thing as a ‘one-size-fits-all’ approach.

Your financial goals and what your attitude to risk is

Different investors are at different stages in their lives. Aside from dividing your investments across different asset classes, there are a number of other factors to take into account as well, in particular what life stage you’re at (such as early in your career or close to retirement), what your financial goals are, and what your attitude to risk is.

Under normal market conditions, diversification is an effective way to reduce risk. If you hold just one investment and it performs badly, you could lose all of your money. If you hold a diversified portfolio with a variety of different investments, it’s much less likely that all of your investments will perform badly at the same time. The profits you earn on the investments that perform well offset the losses on those that perform poorly.

Spreading your investments within asset classes

While it cannot guarantee against losses, diversifying your portfolio effectively – holding a blend of assets to help you navigate the volatility of markets – is vital to achieving your long-term financial goals whilst minimising risk. Although you can diversify within one asset class – for instance, by holding shares (or equities) in several companies that operate in different sectors – this will fail to insulate you from systemic risks, such as international stock market volatility.

As well as investing across asset classes, you can further diversify by spreading your investments within asset classes. For instance, corporate bonds and government bonds can offer very different propositions, with the former tending to offer higher possible returns but with a higher risk of defaults, or bond repayments not being met by the issuer.

There are four main types of investment, known as ‘asset classes’. Each asset class has different characteristics and advantages and disadvantages for investors.

Diversify cross assets valued in different currencies

Effective diversification is likely to allocate investments across different countries and regions in order to help insulate your portfolio from local market crises or downturns, as we’ve been seeing recently. Markets around the world tend to perform differently day to day, reflecting short-term sentiment and long-term trends.

There is, however, the added danger of currency risk when investing in different countries, as the value of international currencies relative to each other changes all the time. Diversifying across assets valued in different currencies, or investing in so-called ‘hedged’ assets that look to minimise the impact from currency swings, should reduce the weakness of any one currency, significantly decreasing the total value of your portfolio.

Creating a more effectively diversified portfolio

Achieving effective diversification across and within asset classes, regions and currencies can be difficult and typically beyond the means of individual investors. Individual funds often focus on one asset class, and sometimes even one region, and therefore typically only offer limited diversification on their own. By investing in several funds, which between them cover a breadth of underlying assets, investors can create a more effectively diversified portfolio.

Multi-asset funds hold a blend of different types of assets designed to offer immediate diversification with one single investment. Broadly speaking, their aim is to offer investors the prospect of less volatile returns by not relying on the fortunes of just one asset class.

Take a long-term view (typically ten years or more)

Multi-asset funds are not all the same, however. Some aim for higher returns in exchange for assuming higher risk in their investments, while others are more defensive, and some focus on delivering an income rather than capital growth. Each fund will have its own objective and risk-return profile, and these will be reflected in the allocation of its investments – for instance, whether the fund is weighted more towards bonds or equities.

As we’ve seen recently, stock markets can be unpredictable. They move frequently – and sometimes sharply – in both directions. It is important to take a long-term view (typically ten years or more) and remember your reasons for investing in the first place.

Be prepared to view the occasional downturns simply as part of a long-term investment strategy, and stay focused on your goals. Historically, the longer you stay invested, the smaller the likelihood you will lose money and the greater the chance you will make money. Of course, it’s worth remembering that past performance is not a guide to what might happen in the future, and the value of your investments can go down as well as up.

Emotions overcome sound investment decisions

Give your money as much time as possible to grow – at least ten years is best. You’ll also benefit from ‘compounding’, which is when the interest or income on your original capital begins to earn and grow too. There will be times of market volatility. Market falls are a natural feature of stock market investing. During these times, it is possible that emotions overcome sound investment decisions – it is best to stay focused on your long-term goals.

Resist the temptation to change your portfolio in response to short-term market movement. ‘Timing’ the markets seldom works in practice and can make it too easy to miss out on any gains. The golden rule to investing is allowing your investments sufficient time to achieve their potential.

Why you’re invested in the first place

Warren Buffett, the American investor and philanthropist, puts it very succinctly: ‘Our favourite holding period is forever.’ Over the long term, investors do experience market falls which happen periodically.

Generally, the wrong thing to do when markets fall by a reasonable margin is to panic and sell out of the market – this just means you have taken the loss. It’s important to remember why you’re invested in the first place and make sure that rationale hasn’t changed. However, it is important to keep in mind that diversification does not guarantee a profit or ensure against a loss.

Shape your personal financial journey

In these extraordinary times, many aspects of our daily lives are being disrupted. We are here to help you shape your personal financial journey. We will understand your ambitions and support you to achieve them through our long-term thinking and expertise borne of experience. To find out more, please contact S4 Financial on 01276 34932 or email hello@s4financial.co.uk.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.