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Kirk Rice Blog

2020 Investment TipsWritten on January 13, 2020 by Kirk Rice LLP

2020 Investment Tips
Financial Services Questions

The Question:

Do you have any tips on how to manage my investments in 2020?

Kirk Rice LLP answers:

Thank you for the question. The following principles should lead investors to a successful outcome in managing their money through 2020 and beyond.

  1. Accept that markets are very efficient at determining prices – as soon as a stock becomes attractive to analysts it’s price will rise, and bad news works quickly in the opposite direction.
  2. Analysts are human and will have their own agenda when they prepare reports. Many analysts will make similar comments about a company, to be too different from the consensus can be very uncomfortable for them.
  3. What has happened in the recent past should be forgotten; investment funds with the best recent performance are no more likely to be the best in the coming period than any other.
  4. Being able to invest for a long time (say seven years or more) will provide the best outcome.
  5. There are market cycles, the timing of which are unpredictable. You could invest just before a large fall, so make sure you invest money you do not need for the long term, see point 4 above.
  6. Understand that expected future cash flows and current market prices are the main factors in moving company share prices.
  7. Globally diversifying your money should provide you with more opportunities and reduce risks compared to being only invested in a single market like the UK.
  8. No one knows which asset class or market will perform best over the next 12 months. If they did know something that could make them a fortune, if all the right conditions are met, ask yourself why they would share that information with anyone else.
  9. Choose your assets (e.g. shares, bonds, property) carefully and across a range of countries and markets.
  10. Understand where your costs are and what you get for each element of cost.
  11. Make sure you understand how and when any tax on income and profit must be paid.
  12. Utilise all available tax-free allowances for Capital Gains, Income and Inheritance Tax such as ISA pensions and other investment products.
  13. Maintain your discipline and do not waiver during market falls or in the face of anxiety-raising media comments.
  14. Understand that your emotions will go through optimism, elation, nervousness and fear while you hold investments. It is normal to experience these thoughts, but on their own, it does not mean you need to change assets.

If you are considering using an independent financial adviser or investment manager for your 2020 investments, you should ask them how they manage these principles in looking after the client’s money.

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Any reader interested in discussing their 2020 investments, can telephone Michael Powell, on 01252 960 550 or email info@kirkrice.co.uk.

Please note: answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made. Tax treatment is based on individual circumstances and may be subject to change in the future. Information is based on our current understanding of taxation legislation and regulations. Any levels and bases or, and reliefs from taxation, are subject to change. The Financial Conduct Authority does not regulate tax planning.