Investing in uncertain times
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Helping you invest in uncertain times
The current economic conditions present financial challenges. However, history shows that getting financial advice and investing with a long-term outlook is key to achieving your financial goals. Here is your three-step plan.
Speak to a financial adviser and get some expert advice. They can help to put your mind at ease about whether you’re doing the right thing. They can also help to take the emotion out of investing and provide an objective view. It may just be the best investment you ever make.
Making your environment comfortable
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Over the following pages we've put together some helpful charts and diagrams that demonstrate the benefits and advantages of a long-term, diversified approach to investing. Click here to download this guide.
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1. Get financial advice
Your money needs to be in the right place to recover in value and make a profit if markets go up, so it’s important not to sell an investment as a knee-jerk reaction if its value goes down temporarily. It’s vital to make a long-term investment plan, stick to it, and don’t try to time the market.
2. Have a long-term financial plan
It’s best to invest in a range of different places where your money has a chance to grow. You should always hold some funds in cash in case of an emergency, but other investments offer better growth potential and by spreading money across different investment types, it is possible to avoid exposing your portfolio to undue risk.
3. Make sure your investments are diversified
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Contents
The advantages of investing early
4
The dangers of inflation
5
The benefits of diversification
6
The importance of investing for the long term
7
The reward of staying invested
8
Next steps
9
Compound interest – earning interest on your interest – can have an incredible effect on your investments.
The chart below shows the benefits of investing as early as possible. Over the past 30 years, an investor could have accumulated £64,791 more than someone who started investing five years later, even though they both invested £10,000. If the other investor wanted to accumulate the same amount they would have needed to make an initial investment of £20,756.
Actions you and your colleague will need to take
> Remind your team member to log their request for parental leave into Workday. > Confirm when, how and who they are happy for you to inform colleagues of their news. > Have regular check-ins to understand how they are feeling and if they need any additional support (if applicable) managing their workload. > Health & Safety will be notified of a pregnancy through Workday, however if they are experiencing any issues with their workstation prior to being contacted advise them to contact the Health & Safety Team on QCORPHealthSafety@quilter.com > Colleagues are entitled to time off for antenatal, adoption and IVF appointments, ask the employee to keep you informed of when these are and to also log them into Workday.
Helping your team member prepare for leave
> Review and familiarise yourself with the HR Parental Leave Policy pages on the intranet. > Check that your acknowledgment letter in Workday is correct i.e. start and end dates. > Discuss with your manager how you would prefer to keep in touch, how often and through what communication medium. > Make sure that your performance review is in the diary a couple of weeks before your leave is due to start. > Review your benefits. Go into You+ benefit site and review the 'life events' section. If you would like to make any changes you need to contact the Reward team at hrrewardteam@quilter.com
Whilst on leave
- Don’t forget about the 10 paid Keeping in Touch (“KIT”) Days and the 20 paid Shared Parental Leave in Touch (“SPILT” ) days. If you would like to take a KIT/SPLIT day, discuss with your manager how and when you would like to take it. - Continue to informally catch up with your manager to ensure you continue to feel connected to the business and your team. - If you change your mind regarding your return to work date, you must give notice of the new date to your manager and log this in Workday. - Enjoy your new addition!
Returning from leave
- Talk to your manager in advance around a phased return to work. - Think about what you want to do with your accrued holidays. - Liaise with your manager at least 4 week before your return to organise any IT requirements prior to you starting back at work. - Discuss with your manager the ‘Back to Work Plan’ i.e. what you will be working on when you return, any training requirements etc. - Apply for additional benefits i.e. Tax – Free Childcare /Childcare Vouchers, include children onto your Private Health Care etc.
Settling back into work
- You may wish to sign up to MentorLoop (on YourCareer) to connect to a mentor. - Set up meetings with colleagues to understand what they’re working on. - Set up any introduction meetings with new colleagues. - Complete your online compliance training. - Organise regular catch ups with your manager and any “buddy” aligned to you. - Get familiar again with the systems and any new work processes and ask for any training where required. - Update yourself with recent Quilter news. - Ensure you are included on any relevant email groups and regular meetings.
Sharing your news
- Notify your manager that you’re taking parental leave. - Log your request for leave into Workday. - Discuss with your manager how you want to inform the rest of your team of your news. - If you are pregnant Health & Safety will be notified of your pregnancy through Workday, however if you are experiencing any issues with your workstation prior to being contacted, then please contact the Health & Safety Team on QCORPHealthSafety@quilter.com. - You are entitled to time off for antenatal, adoption and IVF appointments, please keep your manager informed of when these are and also log them on Workday. - Discuss any reasonable adjustments that you may need with your manger.
Source: Quilter Investors as at 30 June 2024. Total return, percentage growth over period 30 June 1994 to 30 June 2024. Based on an initial investment of £10,000 into the MSCI All Country World Index. This information provided is for illustrative purposes only and doesn’t represent the past performance of any particular investment. It is not possible to invest directly into an index.
Key takaways
Invest as early and as soon as you can. Grow your investments quicker by earning interest on your interest. Avoid withdrawing money to boost the effects of compound interest.
Return (£)
It is tempting to see cash as a safe haven against market volatility, but inflation can be very damaging to your investments.
The chart below demonstrates how inflation of just three percent can reduce the value of cash by almost half over a twenty year period. Inflation can be incredibly corrosive to any savings held in cash.
Inflation can be devastating to your savings over the long term. Holding your investments in cash does not provide any protection against inflation. Cash should only be held for an emergency or for short- to medium-term income purposes.
£6,730
£5,537
£3,769
Volatility is the extent and speed of change in the value of a financial security such as a bond or equity. The greater the movements in the price of a security, and the shorter the timeframe of such changes, the higher its volatility. The higher the volatility of an asset, the more unpredictable and extreme its price movements.
Inflation is the rate of increase in the price of goods and services. For most countries, it’s based on a basket of items that are assumed to represent the cost of living. Inflation increases the cost of goods and services but decreases the real value of cash savings.
Source: Quilter Investors as at 30 June 2024. This information provided is for illustrative purposes only and doesn’t represent the past performance of any particular investment.
By spreading your money across different types of assets, it is possible to avoid exposing your investments to undue risk.
The jumble of colours below – with each colour representing a different type of asset – shows how varied the performance of equities (company shares), bonds, and property has been over the past 10 years. There is no guarantee that the investment that is top in one year will perform well in the next.
Best
Worst
Return (%)
Source: Quilter Investors as at 30 June 2024. Discrete annual return, percentage growth over period 1 July 2014 to 30 June 2024. Asia Pacific equities is represented by the MSCI AC Asia Pacific Index; Cash by the Bank of England Base Rate; Commodities by the Bloomberg Commodity Index; Emerging markets equities by the MSCI EM (Emerging Markets) Index; Europe ex UK equities by the MSCI Europe Ex UK Index Global bonds by the Bloomberg Global Aggregate Index; IA Mixed 40-85% Shares by the IA Mixed 40-85% Shares sector average; UK equities d by the MSCI United Kingdom All Cap; UK gilts by the ICE BofA UK Gilt Index; UK property by the IA UK Direct Property sector average; and US equities by the MSCI North America Index. The information provided is for illustrative purposes only and doesn’t represent the past performance of any particular investment. It is not possible to invest directly into an index.
Spread your money across a range of different investments to reduce risk. Don’t assume that the past performance of an investment will reflect its future performance. Investing in a range of assets is likely to be more successful than trying to pick just one or two.
Equities are company shares. In most instances, except for private equity, they describe shares in listed companies that are traded on recognised stock markets. Being a shareholder confers a right to a share in a company’s profits that are distributed as dividends.
Bonds are fixed-income investments that represent a loan made by an investor to a borrower such as a government, company, or large institution. In principle, bond investors are lending money (the principal) to the bond issuer in return for a fixed or variable rate of interest (coupon) during the term of the bond. When the term ends (maturity), the issuer repays the principal to the investor.
Property, also known as real estate, is the term for investments in housing or other real-estate assets, such as retail sites and shops, office buildings, warehousing, logistics sites, and industrial premises.
Investing with a long-term outlook is the best way for you to reduce the impact of stock market fluctuations and to grow your investments over time.
The chart below shows that over the long term, there is an upward trend of returns from equities and bonds, despite the short-term volatility caused by major events. In fact, an investment into global equities could have grown by nearly 1,100% over the past 30 years.
Source: Quilter Investors as at 30 June 2024. Total return, percentage growth over period 30 June 1994 to 30 June 2024. Based on an initial investment of £10,000. Global equities is represented by the MSCI All Country World Index; Global bonds is represented by the Bloomberg Global Aggregate Index; and Cash is represented by the Bank of England Base Rate. The information provided is for illustrative purposes only and doesn’t represent the past performance of any particular investment. It is not possible to invest directly into an index.
Don’t let short-term blips distract you from your long-term plan. People who stay invested are more likely to see their investments recover. Investing over the longer term (five years or more) is more likely to be successful.
Cash
Cumulative returns
5 years
10 years
20 years
30 years
78%
3%
7%
Global equities
Global bonds
Click here to see the returns over different time periods
Source: Quilter Investors as at 30 June 2024. Total return, percentage growth, rounded to one decimal place over periods shown to 30 June 2024.
During periods of volatility it can be tempting to exit the market but missing just a few of the best days can have a big impact on your overall return.
The chart below shows that someone who stayed invested in global equities over the past 30 years, could have received a potential return more than four times greater than someone who missed the best 25 days.
Time in the market is usually more successful than trying to time the market. Keeping your money invested means you can benefit from any upsides or bounces. Missing just a few good days can significantly reduce how much your investment grows.
Source: Quilter Investors as at 30 June 2024. Total return in pounds sterling over period 30 June 1994 to 30 June 2024. Based on an initial investment of £10,000 into the MSCI All Country World Index. The information provided is for illustrative purposes only and doesn’t represent the past performance of any particular investment. It is not possible to invest directly into an index.
Thank you for investing with us
We are dedicated to making sure your investment journey with us is as smooth as possible. Please visit our website at www.quilter.com for all the latest news, views, and portfolio information.
Your financial adviser is on hand to discuss anything related to your investment decisions.
If you are a financial adviser and want to find out more about our solutions, please speak to one of our investment directors on +44 (0)207 167 3700, email us at enquiries@quilter.com, or visit our website at www.quilter.com
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Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The value of investments may go down as well as up and investors may not get back the amount originally invested. This communication is issued by Quilter Investors, a trading name of Quilter Investors Limited. Quilter Investors is registered in England and Wales under number 04227837 and is authorised and regulated by the Financial Conduct Authority (FCA) under number 208543. Registered office: Senator House, 85 Queen Victoria Street, London, United Kingdom, EC4V 4AB. This communication is for information purposes only. Quilter Investors uses all reasonable skill and care in compiling the information in this communication and in ensuring its accuracy, but no assurances or warranties are given. Investors should not rely on the information in this communication when making investment decisions. Nothing in this communication constitutes advice or a personal recommendation. This communication is for information purposes only and is not an offer or solicitation to buy or sell any Quilter Investors portfolio or fund. Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Quilter Investors as a result of using different assumptions and criteria. Data from third parties is included in this communication and those third parties do not accept any liability for errors and omissions. Investors should read the important information provided by the third parties, which can be found at www.quilter.com/third-party-data. Where this communication contains data from third parties, Quilter Investors cannot guarantee the accuracy, reliability or completeness of the third-party data and accepts no responsibility or liability whatsoever in respect of such data. Published date: August 2024 Review date: August 2025 QI 26736/28/8020
