Brian’s Brainstorm
Your Investments and the Autumn Statement
If you want to increase your chances of being a successful investor; we suggest you take no notice of the news media. This is because the news coverage is unbalanced. When financial markets fall dramatically it will inevitably be front page news; but have you ever considered when stock markets post huge gains it does not interest the mainstream media in the same way. The alarmist media coverage of stock market losses encourages investors to make bad panic driven investment decisions.
There is a wealth of evidence that individual investors perform worse than the stock markets they are invested in; principally because they do not hold for the long term. In the 1960s when there wasn’t saturation media coverage of financial markets the average period an individual held a stock was eight years. Now it is around four months. This higher turnover eats into investor returns.
Meanwhile the media are obsessed by known unknowns. A massive amount of time and effort is devoted to so-called experts to trying to predict the things we know we do not know; and their recent track record has been poor. The majority of pundits got the UK general election, the EU referendum and the US presidential election wrong.
Investors instead should concentrate on known knowns. Time and energy should be devoted to unearthing investments that an investor is happy to hold for the long term.
So if you are easily distracted by the media, leave your investment decisions to someone who isn’t.
Brian Durrant
News
We still have a very limited number of places available for both our morning and afternoon seminars with Justin Urquhart Stewart on 1st December.
Please click on this link to see more details on these events.
Autumn Statement 2016
The first major economic statement since the EU referendum focused on measures to “prepare our economy to be resilient as we exit the EU”.
Unsurprisingly, the Office for Budget Responsibility (OBR) forecasts for growth have changed since the last figures were published in March. The prediction for 2016 is 2.1%, slightly higher than the 2% forecast in March 2016.
However, in 2017 growth is expected to slow to 1.4%, lower than the 2.2% predicted at the Budget in March.
Aside from economics, chancellor Philip Hammond’s first Autumn Statement was light on new announcements.
There was a focus on investment in infrastructure and innovation with money allocated for R&D, homebuilding
and transport.
He also confirmed various measures announced at Budget 2016 including:
- An £11,500 personal allowance from April 2017
- Corporation tax will fall to 17% by 2020
Details on these and other financial changes from the Autumn Statement can be found summarised on our website by following the link below:
Ian Bromley
Staff Matters
- Recently a number of the team traveled to Newcastle to attend the second annual WonderLAN Ball held in The Great North Museum. Nearly £10,000 was raised on the night to help Headway, a charity Conçerva works closely with. The event was a great success with the performance of Marc Almond (of Soft Cell fame for the youngsters) being a particular highlight.
- Spare a thought for Martin who, after all his hard work helping to arrange Conçerva’s sponsorship of the event, was kept from attending due to the birth of his first grandchild Faith. Congratulations Grandad!
- Also this month our graduate trainee, Chris Gregory, was presented with his Gold Duke of Edinburgh Award in a ceremony at St James’s Palace a full eight years after beginning the final stage of the programme back in 2008.
Statistical Information
| Last Month | This Month | Change | |
|---|---|---|---|
| CPI | 1.0% | 0.9% | -0.1% |
| RPI | 2.0% | 2.0% | 0.0% |
The latest inflation figures released on 15th November 2016 by the Office for National Statistics recorded the Consumer Prices Index falling from last month while the Retail Prices Index remained unchanged.
The main downward contributor to the inflation figures came from the clothing and footwear sector. At the same time education and recreation costs increased much more slowly than this time last year resulting in a slowdown of inflation. Conversely transport costs especially those of motor fuels caused inflation to increase with the fuel prices reflecting the movement in oil prices coming from the sterling depreciation against the dollar.
| October 2016 | November 2016 | Change | |
|---|---|---|---|
| Base Rate | 0.25% | 0.25% | 0.00% |
Following the Monetary Policy Committee’s (MPC) decision to cut the Base Rate to 0.25% in August the various members voted unanimously to maintain this current rate during the meeting on 3rd November.
The next meeting of the MPC will be on 15th December.