Welcome back to our monthly news.
Well, 2022 was a somewhat difficult financial year that we’ve just left behind us! Inflation soared resulting in significant cost of living challenges, interest rates on borrowings (but not deposits) have increased significantly and stock markets fell quite sharply. The picture for 2023 is still somewhat uncertain. The Irish economy is forecast to grow, but at more modest levels, the war in Ukraine and the economic uncertainty as a result continues and the geopolitical backdrop around the world is all a bit tense at the moment.
So how does all of this translate into your personal finances? We’d like to set out a few thoughts to help you navigate through these uncertain times.
Focus on the long term
It can be so easy to get caught up in the immediate impacts of these issues. However, remember your long-term goals. Are you saving for retirement or maybe for the kids’ education in 10 years’ time? If so, does it really matter if your investment fund has dropped a little in 2022? Staying committed to your long-term plan is most likely the best way to achieving your financial goals, as opposed to making short-term tactical decisions.
Get your money working for you
Interest rates have gone up, but unfortunately hardly at all for savers. Money in the bank is just making you poorer, as it is eaten away by inflation. We also understand that not everyone wants to significantly increase the level of risk taken with their money. Talk to us about other alternatives available – there are some very attractive multi-asset investment options out there, with high levels of capital protection for the more conservative investors.
Don’t make rash decisions
Research* suggests that the pain of losing money impacts people psychologically about twice as much as the pleasure experienced when making money. This is important, as this pain leads people to make ill-considered and often costly financial decisions. Now is not the time to make knee-jerk decisions. None of know what the markets will do tomorrow, next week or throughout 2023. So don’t try and time them by suddenly exiting (or entering) the market. Stick to the plan.
Particularly with the cost of living challenges that everyone is experiencing today, it can be hard to keep saving. We are also sometimes asked if it makes sense to invest as markets have fallen and remain volatile. Our answer is yes, it does make sense, but in a controlled way and maybe spread over time. Think of markets having fallen as a discount sale – we all like buying things at reduced prices!
Economies and markets are cyclical
Shut out the noise, the good days will return again. Avoid the doomsayers in the media who suggest the world is ending. Instead listen to the people you trust about your finances – we hope that’s us! We’ll keep you on the right path by keeping you focused on what matters – achieving your long-term financial objectives.
These are just some of the financial tips we like to share with you. We are running a Finance Feb webinar on the 28th Febrauary 6pm. To register and find out more about financial planning with us, click here: https://mailchi.mp/4d131d348528/webinar
For more information, you can contact email@example.com