Hurricane Gonzalo; we need to get better at weathering storms

The tail end of Hurricane Gonzalo has hit the UK. The British people are holding onto their hats as rain and high winds batter the Welsh and Scottish coast lines, causing travel disruption for thousands of commuters.

Few people enjoy extremes. Highs and lows disrupt the rhythm of everyday life and shake our security. It makes some people worry, change plans or even make decisions they later regret.

When it comes to financial planning, the fears of highs and lows are why many are fearful of investing and often leave their savings held in cash.

Cash savings may be providing little return in interest at the moment, but for some the security of having nothing, is better than the prospect of having to weather the storm of stock market fluctuations.

Just as Hurricanes are categorised in terms of their strength, risk and severity, so too are investments.

You can choose to take a cautious, low risk approach to investing your money, with the aim to provide a better return than cash saving. Or, you can take a very high risk based approach, with the aim of producing much higher returns. The point is that if a hurricane were to hit the world of stock markets, you should only ever be invested up to the point where you could comfortably sit and enjoy the rain.

At Sanlam, our aim is to make investing accessible and easy to understand. As part of our advisory process we talk to our clients about their tolerance and capacity towards taking investment risk, alongside achieving their investment goals. We find the right balance of risk versus reward.

Sanlam offers a range of seven portfolios which allow our clients to invest in a diverse range of carefully selected investments, bonds and cash, which are designed to match the individual client’s attitude to risk.

The Sanlam Accel models are colour coded Red, Orange, Yellow, Green, Blue, Indigo and Violet. Red being the most cautious, with Violet more suited to clients who are comfortable watching the markets rise and fall, in order to achieve higher returns.

Making risk a fundamental part of the Sanlam advisory process means that when financial markets become volatile and a storm is brewing, our clients know that they don’t need to batten down the hatches and worry. Dark clouds may well be on the horizon, but because their investment portfolio suits their individual needs, there is little need to worry.

Good financial planning is all about being prepared for the unexpected. To be saving for the future, to not take unnecessary risk and have made decisions which are considered, balanced and appropriate.

This article is for information purposes and should not be treated as advice. Individual circumstances should always be considered prior to purchasing any financial products. For further information please contact your Wealth Planner.

Sanlam is a trading name of Sanlam Wealth Planning UK Ltd (Reg. in England 3879955) and English Mutual Ltd (Reg. in England 6685913). English Mutual Ltd is an appointed representative of Sanlam Wealth Planning UK Ltd which is authorised and regulated by the Financial Conduct Authority.

Holding money in cash because of a fear of investing can be considered a risk during long periods of low interest rates. Cash savings may sound secure, but without good rates of interest being paid, savings can struggle to keep up with inflation.

You don’t have to be knowledgeable about investing to be an investor; it is about speaking to a Wealth Planner to get good financial advice. If you are considering alternative investments for your cash savings, speak to your Wealth Planner. If you would like to find out more about Sanlam and our risk based approach to providing wealth management advice, email us at letstalk@sanlam.co.uk