Financial Planning: Popular New Year’s Resolution
Ronan Reid
Ronan Reid

All the staff at Cantor Fitzgerald would like to take this opportunity to wish you a happy and prosperous New Year.

2019 was a strong but noisy year. Markets traded higher undeterred by a number of geo-political developments. Interest rates remain low and return on monies is negative in Europe, while US banks placing monies with the Federal Reserve are earning at least some interest. Such uncertainty generates market volatility, and we can expect more in 2020.

At a time of fresh beginnings and resolutions, now is a better time than ever to focus on having a solid, long term financial plan in place. Taking the time this January to sit down and consider long term financial aspirations, through retirement and beyond, will help you get a firm understanding of your own very personal goals.

Clarity on your goals, allows for the most appropriate and strategic investment strategy to be designed for you. You may have very practical short-term plans, but these can equally stretch to medium-term dreams of extended travel or the long-term realities of succession planning. It is not uncommon for a portfolio manager to manage more than one investment strategy in separate portfolios which are based on your different goals. Think of it as a goal-based approach to investing, setting up different investment buckets for your short, medium and long-term goals.

A short-term goal might be a college fund for children, a deposit for a larger house or possibly a property deposit for your own child. A medium/long-term goal might be to fund your retirement. For any additional funds your long-term aspirational goal might be to preserve your wealth to pass onto your children or grandchildren.

Typically, your short-term goal is more defined and predictable and would encompass lower risk investments. Generally, the longer your money remains invested the greater the potential for growth as market trends and fluctuations tend to smooth out over time.

As you will note within this month’s Investment Journal, Pearse Mc Manus (Chief Investment Officer of Merrion Investment Managers/MIM) expresses some concern at the level of growth assumed in equity markets and overall valuation levels. MIM offer a suite of multi-asset funds that invest across equities, fixed income, cash and absolute return strategies and specialise in active investment management. The Multi-Asset 30, 50 and 70 range caters for different risk profiles and can be accessed through our private client team. MIM’s flagship Multi-Asset 70 fund outperformed its benchmark by circa 4% in 2019.

David Beaton (Chief Investment Officer of Cantor Fitzgerald Ireland) and our equity research team have made a number of changes to the Cantor Core Portfolio, reflecting a move from some Irish, UK and pro cyclical equities to renewable energy, leisure, telecom and Emerging Market investments amongst others. The portfolio generated a performance of +22% for 2019.

On a separate note, Pramit Ghose, who manages discretionary portfolios, highlights that inclusive of dividend growth equities can provide a real yield. Dividend alone is no longer enough to generate a successful return. Other attributes that lead to a greater predictability of earnings and dividend growth should be considered.

This is where strategy plays its part and where asset allocation, balancing risk and reward and reviewing on an ongoing basis is the key to potentially growing your wealth, and to helping to make your future plans a reality.

Once a financial plan is in place, it becomes an ongoing process which is reviewed regularly to ensure your funds are progressing in the right direction and that you are moving closer to your goals. The new year is always a good time to adjust and review. Please feel free to chat to us over the coming weeks and months and we would be delighted to support your positive New Year’s resolution to achieve your financial goals.

Wishing you all the best for the decade ahead.

Ronan Reid is Chief Executive Officer of Cantor Fitzgerald Ireland.

To speak with a Portfolio Manager or Account Executive today, please phone the Cantor Fitzgerald dealing desk on 01 633 3633.