Brexit. Are you a smart investor or the sit and wait type?
We have known for quite some time, the decision to leave the European Union (Brexit) would have an impact on currency and stock market holdings. However, there is one financial sector which will thrive as a result, the bond market.As is always the case when there is economic uncertainty, shrewd investors seek out safe havens while markets stabilise. The current trend is to strengthen your portfolio with the security that bonds offer. This is opposed to the volatility and uncertainty of other investment classes, such as equities, commodities and Forex (FX).Smart investor will take stock of their position and put in place the best strategy to protect their portfolio. This requires investors to be proactive, rather than stand on the outside looking in. For the masses, they pause. They Standstill. Sit and wait.Take a look at a recent article from the Telegraph business section, it makes for very interesting reading on how best to protect against Brexit. CLICK HEREBonds have always been a popular investment for British investors as they provide investors with a regular income, they are also seen as a very important addition to balance out and diversify an investment portfolio. Overseas investors will also see this as a great opportunity to take advantage of the pound. Take a look at diversifying your portfolio HERE
Brexit. So what’s next for the UK post EU Referendum?Well there is the obvious knee jerk reaction to the voting results with markets being affected. The Bank of England says it expects some market volatility after the Brexit vote but that the UK economy can handle it. “Inevitably, there will be a period of uncertainty and adjustment following this result.Brexit has caused in a short space of time uncertainty. People worry about what happens next and it makes people feel vulnerable. With uncertainty people generally take a breath. They pause. They put things on hold. Why; because there is a general sense of fear. Successful investors tend to take control of the fear. Be decisive and listen to those with credibility and knowledge. Not just those who throw statements out without backing it up. We’ve heard enough of these misinformed vocal debates with the political campaigns.Warren buffet arguably the greatest investor of our generation buys or invests in times of uncertainty. If the wealthiest investor is saying this, then when is it a good time to invest? If you don’t know who Warren Buffet is take a look at this link http://bit.ly/therichestinvestorCurrency
The Pound has weakened against the dollar and the Euro. But haven’t we seen this before? What happened? It strengthened again. One industry where the UK is strong in is finance. London is one of the biggest financial centres in the world. History shows that when industries go down they eventually come back up.Property Landlords
Now that Cameron has resigned will the removal of mortgage tax relief still go ahead next year with a new conservative leader to be in place by October? Along with the 3% increase in stamp duty this has got to be the biggest blow to property investors and landlords. A different leader and different approach? If this new tax goes ahead, there will be the inevitable higher rents making it harder for first time buyers.
There is talk that interest rates might have to be increased due the pressure of inflation. Equally there is more speculation that interest rates might have to be lowered if there is a severe shock to the economy. Who actually knows?
The IMF have been quoted that there could be a drop in house prices. That is possible. There could be a possible drop but always starts in London. But with the high predictions for growth in property market pre Brexit, we are talking a possible drop on where it WOULD have been in the next few years. So still up but maybe not as much. The housing shortage is still present. The demand for houses continues to increase.
One thing which is clear that there are changes ahead but is the UK going to fall on its knees as the scaremongering has been quoted? The UK existed before the EU and it will exist post the EU.
Mark Carney the Governor of the Bank of England has stated “There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold. “And it will take some time for the United Kingdom to establish new relationships with Europe and the rest of the world.”
Carney added the Bank expects “some market and economic volatility” as those new relationships are struck. He added: “But we are well prepared for this. The Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have been in close contact, including through the night and this morning. The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.”
A sensible and level headed approach is what’s needed but today is a reflection and an instant reaction to the results of the EU Referendum. There is no crystal ball. There are no guarantees. There has never been.
What investors need to know. Now that the media attention has died down, it’s a good time to reflect on some of the 2016 Spring Budget welcome changes introduced for savers and investors.
Whilst the adult Individual Savings Account (ISA) limit for the current tax year remains at £15,240, savers and investors will be able to choose to invest in cash ISAs, stocks and shares ISAs, or an ISA which operates through peer-to-peer lending platforms, or a mixture of the three, up to the permitted allowance. Barrington Howe will shortly be announcing an ISA offering to maximise your tax allowance with one of the best cash ISA opportunities. A great opportunity for investors looking for the best ISA rates.
From April 2017 the ISA allowance will rise to £20,000; this is clearly good news for savers and investors looking to put more of their money into tax-efficient investments.
Increased personal allowances
The personal allowance, the amount you can earn before paying income tax, is increased to £11,000 in the current tax year and will rise to £11,500 from April 2017. The higher rate tax threshold is increased to £43,000 for this tax year and will rise to £45,000 in the 2017-18 tax year.
Capital Gains Tax
The first £11,100 of gains made in this tax year will be free from Capital Gains Tax (CGT). The Chancellor announced more good news in the form of a rate cut for those liable to CGT in the current tax year. In changes that the government hope will encourage further investment in business, a basic rate taxpayer will see the rate drop from 18% to 10%, and higher rate tax payers will see it fall from 28% to 20%. However, those who own a second property will continue to pay at either 18% or 28% when that property is sold.
The Chancellor decided to leave pension tax relief alone, meaning that the incentives to save remain in place.
Scams are on the rise
The tactics used by scammers to encourage people to part with their hard-earned savings and pension funds are often highly-sophisticated and constantly changing, so it’s very important for you to be fraud aware. One example has been outlined by Action Fraud1, the UK’s national reporting centre for fraud and cyber-crime. It has issued a warning about a new scam that has recently come to their attention targeting people in their 50s and 60s. This involves fraudsters offering investments in property in Cape Verde. Often the cold calling companies are over selling these opportunities and in some cases they are fictitious.
How to avoid Fraudulent companies?
There are a number of ways to avoid such companies if you are looking for an investment.
Meet the companies involved. Often people are stand offish. You get more from a face to face meeting than you do on the phone Gain a bit of knowledge. Try to understand the investment. Anyone with more knowledge on a subject can be more comfortable but more importantly make an informed decision.
Ask for a due diligence pack or further background information. Make your own enquiries. Do an internet search and see what is being written about them.
Germany and German real estate in particular is seeing a sustained growth. Dolphin Trust, one of our investment opportunities is reaping the rewards.
German Private Sector Growth Accelerates
Further investment news shows that growth in Germany’s private sector accelerated in May to hit the highest level so far this year, a survey showed today. This suggests that Europe’s largest economy will extend its surprisingly strong start to the year into the second quarter. Click Here to Read the full story
European Real Estate Continues to Attract Investors
Investor appetite continues to grow in most European commercial markets, with Germany leading the way for the 2nd quarter in a row. For further details CLICK HERE
German Economy Fared Well in Q1 as Trade Surplus Grows
The trade surplus is a key gauge of an economy’s comparative strength and in recent months has highlighted the robustness of Europe’s biggest economy amid the current global economic uncertainties. For further details CLICK HERE
Dolphin Trust updates
This is the latest update on some of the current developments benefiting our Dolphin Trust clients.
The Old Cigar Factory, Fabrikweg 12, Horb
The old Cigar Factory in Horb now has a new face! In the words of the project co-ordinator, Jochen Krause of Deutsche Planbau GmbH, thanks to the fast progress of the teams at the Dolphin Trust construction site, the Cigar Factory has now had a facelift.
During refurbishment, Dolphin Trust will create nine new apartments in the old Cigar Factory and will bring new life to the government listed building, built in 1898. Despite its historic age, modern standards of energy efficiency will be achieved and high value materials will be used for all apartments for modern living comforts.
In the last few days the loggia, which is visible from the street, has been finished. The old roof section above the stairway has also been completely renewed and the attic has new flooring. In just a few more days the ceilings of all floors will be completed.
For full details on this investment opportunity please CLICK HERE