6/10 For Effort
Good morning all,
And so we march on through 2025, and now in the month of June. What a cracking May that was, wasn’t it? The weather was glorious; a delicious 18-24 degrees most of the time. It’s like the summer we had during Covid, but this time without, you know, all of that.
Quite a bit going on lately. We will be visiting a recurring theme on the subject of scams (someone had a reasonable attempt at scamming me – details below), you can try your hand at timing the market and see if you can do better than me (you probably will), and for the main dish today we will be considering that we are all perpetual investors. The crossing over to the spending part of our lives does not mean that the investment markets are a thing of the past, quite the opposite. More on this later.
Personally, we had a case of hand, foot, and mouth making its way through the house at the tail end of May. That is a nasty illness for the little ones, our youngest Orla was not too happy for a few days. It actually led to the kids birthday parties suffering a last-minute cancellation, but that’s life sometimes.
On a happier note, their cake was outstanding (although we still have loads left to get through):
Finally, and again on the personal side, I am taking some time off during the month of June. I’m currently writing from beautiful Saint Tropez in Southern France, a part of the world we have not really explored. So if the responses are a little slower than normal, that is what is going on and thank you for bearing with me.
Let’s dive in.
Monthly Market Visuals
You Stop. Your Money Shouldn’t
Picture the scene - you've finally done it. After decades of saving and investing, you have reached retirement. Que enormous relief and excitement about what awaits in the next chapter of life. But alas! A new worry creeps in. For the first time ever, you're living off of your investments instead of adding to them every month.
For many investors/retirees, their first instinct is to “play it safe” with their hard-earned investments. This thinking may have made sense for previous generations. Most investors retired, bought an annuity (turned their pension pot into an income for life), and lived off the guaranteed payments. For many, the investing was done, the end of the road.
But times have really changed. Today's retirees (couples) face retirement periods of 20 to 30+ years, not the shorter timelines of the past. At the same time, investment markets have become more sophisticated, while lower interest rates have made guaranteed products less appealing.
What was once a safe approach is now a risk to your financial future. Our challenge to all investors, especially retirees, is to recognise that their investment timeline is much longer than they think.
The Reality Check: You're Investing for Decades, Not Years
The conventional strategy of gradually shifting to low-return, low-volatility portfolios in the years leading up to retirement is no longer sensible given this reality.
Indeed, it never was sensible, but that’s a whole other conversation.
Rather than being at the investment finishing line, you are merely at the intermission. Your planning, mindset, and investment strategy need to reflect this. Your assets will ideally need to provide a rising income for up to three decades to keep pace with inflation.
This might feel overwhelming. But it's actually good news. You're not a retiree managing a shrinking pot of money. You're still a long-term investor, just in a different life phase.
Why Playing It 'Safe' Is Actually Risky
I understand that market volatility feels different when you can't replace temporary declines with further contributions. Your appetite for risk has changed, and those "stable" investments look awfully appealing.
But playing it safe is often the riskiest thing you can do.
While you're focused on avoiding short-term fluctuations, inflation is quietly eroding your purchasing power. The things you buy today will cost dramatically more over the decades ahead. Meanwhile, those "safe" investments? They often can't keep up with rising prices.
The answer is not to throw caution to the wind. However, by understanding your required rate of return and building in a safety net, you can put yourself in a position to retire with confidence.
As an example, by keeping one to three years of expenses in cash or short-term investments, you’ll never be forced to sell assets at a bad time. You gain peace of mind, but your remaining funds can still pursue the growth you need.
We know from history that market volatility is temporary. Markets recover. But the damage is of inflation is irreversible. Long-term investment returns are permanent, too, building wealth for those patient enough to stay invested.
The cash bucket lets you ignore the temporary whilst capturing the permanent.
Embracing Your True Investment Timeline
I can’t stress this enough: you're not a retiree managing declining assets. You're a long-term investor with a multi-decade investment horizon. Your investment strategy and asset allocation should reflect this reality.
I understand that maintaining growth-oriented portfolios in retirement requires both courage and careful planning. That’s the name of the game on this end, balancing the risk/return requirement, and ensuring that we stay in our seats through the bumpy times.
Your financial independence over the coming decades depends on striking the right balance. But “safe” isn’t always as it appears, and growth is essential, lest we watch the purchasing power of our coins fade over time.
6/10 For Effort
There I was on a quiet Thursday morning, minding my own business and cracking on with some work. Then into the inbox arrives an interestingly worded email, written from the office of a law firm, apparently.
I thought it might be useful to dissect it and why I worked out it was a scam, as it’s perhaps not immediately obvious.
The blue scribbles were added by me to block out the lawyer’s name that the scammers misappropriated. The individual is a real person and probably wouldn’t appreciate being named. I did later contact him via LinkedIn, one to verify that it was a scam and secondly to alert him of the identify theft.
So straight away, a few things to note:
- Picture sign off is weird and suspicious (although perhaps partly due to my working from a black background).
- Email domain is however authentic and looks the part.
- Wording of email is good although clearly a copy & paste job re the company name. Still, that could be legit.
- The law firm is real and regulated by the Solicitors Regulation Authority.
- The address in the email matches the SRA page.
- The individual is the same, although I won’t link his page.
So all in all, it wasn’t a bad effort. Being human, there is often that instant feeling when you read something like the above, before logic kicks in, where you start to worry and you think about the consequences of the potential issue. In the cold light of day, it is perhaps more obvious it is a scam, but at the time, your brain isn’t quite as logical as it perhaps normally is. That’s certainly true for me.
The idea of the scam is for the recipient of the email to call the number listed (a virtual number not tied to physical address, no doubt) and to make a payment to avoid the issue rearing it’s head. Except of course, there is no issue, and the whole thing is fraudulent.
Anyway, in this instance, lots of credit is due to the good people at the SRA. They have a full section of their website dedicated to highlighting such scams, and the attempt made towards me is fairly standard. I have of course highlighted the above to them.
So there we are. I thought it might be useful to share this, as I’m sure we are all going to be the target of such nonsense from time to time.
As an aside, a potential defence for us all could be found in our soon-to-be AI overlords. I ran the unredacted screenshot through my Microsoft CoPilot AI and asked it (him/her/they/them – there’s a can of worms) what it thought; was the email genuine or more likely a scam?
CoPilot scam detection for the win:
So, that might be useful if you find yourself in that situation. No matter what you do, take your time and analyse things – scammers benefit from our emotional and instinctive reactions.
As a final aside (I promise), it brought home one of the lesser-discussed advantages of having a financial planner engaged on a professional basis. Many of the platforms and providers that we work with insist that an adviser actually punches in the request for a withdrawal, a change of bank details, etc. Even the other platforms where the client has a little more control copy the adviser into all correspondence and all transactions, giving us time to intervene if necessary.
So whilst nothing at all is foolproof, working with an adviser is perhaps an extra layer of defence in the fight against financial crime. There are two parties – the client and the adviser – that are required in almost all major transactions. Just a thought.
Timing The Market – How Well Can You Do?
A fun little game with a lesson behind it. Below is my score, and needless to say it wasn’t the best:
Whilst it may be stating the obvious, we do not try to time the market at Purpose Financial Planning. Yes, it is possible, but it is very hard to accomplish consistently, and more often than not you will inhibit the performance of your investment portfolio rather than improve it.
Have a go here. The top prize is a much-coveted branded Purpose Financial Planning mug, as seen modelled absolutely nowhere.
Optimism Prism
Your monthly dose of the good stuff:
The Length of Software Tasks AI Can Do Is Increasing Quickly
InventWood to Produce Wood That’s Stronger than Steel
Apple to Support Brain-Implant Control of Its Devices
Recommendations
I attended a talk by Simon Rogerson, CEO of Octopus recently. So much sense was spoken in that quick 20 minutes I almost found myself optimistic about the economic state of the UK. Reality set in of course and the endorphins faded, but still, he is very much worth your attention. A fantastic speaker.
My friend Keith Boyes (MD of Spentwell in Edinburgh) and I also managed to sneak a quick picture with Sir Chris Hoy at the same event. An absolute gentleman:
I recently renewed my subscription to my VPN and anti-virus software. A new service they are offering is called Incogni, which contacts “data brokers” (organisations that acquire and sell your data, very often your contact details) and asks them to remove anything that they hold on. In theory, that should greatly lessen the amount of scam calls. Seemed like an idea worth sharing.
That’s us for this month!
All the best,
Andy
• This newsletter is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
• Past performance is used as a guide only; it is no guarantee of future performance.
• Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.
• The value of investments and any income from them can fall as well as rise. You may not get back the full amount invested.
Levels and bases of, and reliefs from, taxation are subject to change and their value will depend upon personal circumstances. Taxation and pension legislation may change in the future.
