Wednesday, 26 November 2014

Generali, RL360, Skandia & Friends Provident 2015 Investment Review

Planning an investment or having issues with your existing investments? Talk to me first - Contact Me




I speak to many clients day to day who have existing investments. Often in the EEA or international market they are investing with one of the major insurance linked platforms such as Generali International (or Generali Pan Europe or Generali Worldwide), RL360 (previously Royal London 360), Skandia (or Royal Skandia or Skandia International), Old Mutual, Hansard, Prudential and/or Friends Provident (or Friends Provident International). They may also hold these kind of platforms through their QROPS or SIPP pension investments.

Many advisers in the offshore market sell these platforms to clients using their insurance licence with no real understanding of how to actually manage the assets within the portfolio. We help many of these clients all over the world by managing the assets and investments within their portfolio's to ensure their investments are appropriate to their long term goals, their attitude to risk and their current financial, tax and/or residency position. We find many clients who have been sold these investments then left to make their own decisions or confused about how their policies actually work.

The key to successful financial planning is to constantly review your approach to the management of your wealth and ask how, why, where and how much you are investing. The investment plans with Generali, RL360, Skandia, Prudential, Hansard, Old Mutual and Friends Provident (or with QROPS / SIPP investments) can be a useful tool for clients but sometimes can lead to missed opportunities or be unsuitable for the client.

We offer potential clients a free review of their investment portfolio. This will show potential new clients the current geographical spread of their investments, the asset class spread and overall risk grading of the current portfolio along with detailing any specific issues with individual fund holdings or overweight / underweight concerns. The kind of information that we provide to our clients on a regular basis. We can also provide advice on alternate investment platforms that may be better suited to your needs if required.


This time of year is perfect to ensure you are positioned correctly. See how your portfolio's current holdings fit with your needs and financial goals.

I don't have my investments with one of these companies! Can I still contact you regarding my portfolio? - Of course, just use the e-mail below or the contact link to the right ----->

Contact me via: andrew.holmes@chasebuchanan.com

Have a great day! Andrew Lumley-Holmes

Thursday, 20 November 2014

What is my investment risk profile?


The starting point of any investment decision should always be how much risk you are prepared to take with your investment. Generally, the more risk you take, the higher the potential returns become but equally the higher the potential for loss becomes. The attitude to risk can also be adjusted to take into account your long term goals for the investment you intend to make.

Below is a simple 3 minute, 6 question task that can help you determine your attitude to risk, along with sample portfolio suggestions for your risk appetite (we assume you already have cash as part of your portfolio).

Risk Profile Questionnaire, choose one answer and total the scores (in brackets) after the answer you have chosen:

1. WHEN IT COMES TO INVESTING, HOW WOULD YOU DESCRIBE YOURSELF?

a) No understanding / knowledge          (10)
b) Very little understanding / knowledge          (20)
c) About as much understanding / knowledge as the next person         (30)
d) A fair degree of understanding / knowledge         (40)
e) A high level of understanding / knowledge          (50)

2. IF YOUR INVESTMENTS DROPPED IN VALUE BY 20%, HOW WOULD YOU REACT?

a) Sell all of the remaining investments          (10)
b) Sell a proportion of the remaining investments          (20)
c) Hold the investments and do nothing          (30)
d) Buy more of the same investments          (40)

3. WHAT ARE YOUR MAIN SAVING AND INVESTMENT GOALS?

a) Immediate income          (20)
b) Specific goals in 5 – 7 years          (30)
c) Specific goals in 8 – 10 years          (40)
d) Longer term growth, 10+ years          (50)

4. HOW WOULD YOU COMPARE YOURSELF TO OTHERS IN TAKING FINANCIAL RISKS?

a) Much less willing to take risks than average          (10)
b) Slightly less willing to take risks than average          (20)
c) No more or less willing to take risks than the next person          (30)
d) Slightly more willing to take risks than average          (40)
e) Much more willing to take risks than average          (50)

5. WHEN YOU HAVE MADE A SIGNIFICANT FINANCIAL DECISION, HOW DO YOU FEEL?

a) Very concerned          (10)
b) Slightly concerned          (20)
c) A little uneasy          (30)
d) Confident           (40)
e) Very confident          (50)

6. IF YOU HAD TO CHOOSE FROM THE FOLLOWING INVESTMENTS, WHICH WOULD IT BE?

A – never has a negative return and return between 0% to 3%          (10)
B – has a negative return once every 12 years and returns -1% to 7%          (20)
C – has a negative return once every 10 years and returns -2% to 9%          (30)
D – has a negative return once every 8 years and returns -3% to 11%          (40)
E – has a negative return once every 6 years and returns -4% to 13%          (50)
F – has a negative return once every 4 years and returns -5% to 15%          (60)

TOTAL SCORE ___________

THE ANSWERS TO THE QUESTIONS LEAD TO ONE OF 5 PORTFOLIOS

Up to 160 Cautious Portfolio
161 – 180 Moderately Cautious Portfolio
181 – 210 Balanced Portfolio
211 – 250 Moderately Adventurous Portfolio
251 plus Adventurous Portfolio

Guide to Investment Assets used in the sample portfolios below from low - high risk:

DB - Domestic Bonds, same currency as investment currency in same country
HY - High Yield Bonds, these may be international in nature with varying currencies
LCD - Large Cap Domestic Stocks and Shares in same country/currency as investment
LCDEV - Large Cap Stocks from developed markets
LCEM - Large Cap Emerging Market Stocks
P - Property Funds, for the purpose of this exercise we are assuming they are international funds
SCDEV - Small Cap dDeveoped market stocks
SCEM - Small Cap Emerging Market Stocks
C - Commodities
SS - Sector Specialist / Single Country Specific Stocks

1. CAUTIOUS
You prefer investments with little risk to your capital. You prepared to accept potentially lower but more predictable returns.



2. MODERATELY CAUTIOUS
You are prepared to accept a relatively low level of risk on investments over the longer term, in order to achieve potentially higher returns.



3. BALANCED
You are prepared to invest in equity based assets, where the risk is spread across a variety of investments and the fund is managed on your behalf, with the aim of potentially higher returns.



4. MODERATELY ADVENTUROUS
You will accept above average risk for the prospect of high returns. You are not concerned with short term volatility. You would expect the majority of your funds to be invested in equities and may invest in funds within a specific geographical area.



5. ADVENTUROUS
You are happy to invest predominantly in equity based assets, where the risk is spread across a variety of investments (some of which are “specialist” investments) and the fund is managed on your behalf, with the aim of potentially higher returns, accepting the increased risk of a loss on your capital.



Summary

This is not a definitive guide to planning a suitable portfolio for your investments but it should serve as a useful guide. A true financial planner or investment manager will take into account other factors before finalising an investment portfolio for their clients.

As always, should you need any help or advice, please contact me.

Have a great day! Andrew Lumley-Holmes.

Friday, 7 November 2014

Blue Chip Stocks for Dividend Income in 2015

What Are Blue Chip Stocks?

Blue Chip stocks are huge, high quality companies normally with a global reach. They are usually well established companies and household names with strong financial backing. This often means they are more secure in times of poor economic conditions and hold their value better than smaller stocks and shares as the dividend income becomes more valuable.
As blue chips are usually established companies they will normally make consistent profits and often pay out a portion of these profits to their shareholders and investors. This is known as a dividend. Why? It attracts investors looking for income and they may have fewer opportunities to re-invest earned income therefore reward investors with the dividend income payment.

What to look for?

When deciding which dividend paying blue chip stocks to buy you should take into account a number of factors including if the dividend payout is sustainable in the long term and the effect the dividend payments have on the price of the shares. You should look at a few points in particular when trying to find dividend income: 

Is the company still growing?
Earnings per share (EPS) over 5/10 years is a good indicator of of a companies growth, if earnings have continued growing you can be reasonably assured the dividend income is sustainable. An increase in earnings should be backed by an increase in revenue. In particular look for consistent growth in the dividend income payouts year by year.
Check trailing dividend yields
Sometimes a stock will pay a one-time dividend higher than normal. They may not repeat it. Look at the previous dividends paid and see if the trend is stable or increasing. If the dividend is a one off payment or is decreasing then it may be a better idea to look for dividend income elsewhere and a different opportunity.
Make Sure some earnings are retained
If a company distributes all of the profit as dividend income it has nothing left to continue building the business. This results in the lack of potential future growth of the company thus you may lose out on an increase in the value (capital gain) of the stock / share that you hold. It may also mean companies dipping into previous undistributed earnings to maintain the dividend levels. Another warning sign that the income is unsustainable.

Some stock ideas:
Below are a list of 20 Blue Chip stocks and shares you may wish to consider adding to your portfolio for dividend income and long term capital growth. They are ranked in no particular order:
Royal Dutch Shell - Energy 
HSBC - Financials
Roche - Health Care
Total - Energy
Sanofi - Health Care
BP - Energy
Unilever - Consumer Staples
British American Tobacco - Consumer Staples
AstraZeneca - Health Care
Siemens - Technology
Woodside Petroleum - Energy
BAE Systems - Industrials
AT & T - Technology
Lockheed Martin Group - Industrials
Johnson & Johnson - Health Care
Microsoft Corp. - Technology
Merck & Co. Inc. - Health Care
TJX Cos. Inc. - Retail
Amlin - Financials
Carillion - Construction
As always if you want specific advice based on your personal situation regarding the suitability of these investments for you then please contact me directly.
Have a great day! Andrew Lumley-Holmes