Latest news with #JasonHollands
The Independent
16-05-2025
- Business
- The Independent
3 financial experts outline the money tips they want you to know
Money can be an ongoing stress for many people, particularly in today's economy with a cost-of-living crisis, inflation and rising bills. There can also be a lack of education when it comes to making your finances work best for you, from knowing how to budget, understanding which is the best savings account to open, and knowing how to invest. We spoke to the head of personal finance at Moneybox, Brian Byrnes, the managing director at Evelyn Partners, Jason Hollands, and the director of financial support at Santander, Mark Weston, about their best and most important money tips that people should know. Set some money aside for emergency funds New research by Santander, carried out in April by IPSOS with members of the UK public, shows that one in five (20%) respondents do not save anything from their personal income across the year. However, Weston says saving is important. 'We do recognise that the cost of living and inflation over the last few years has made it much more difficult for people to save,' says Weston. 'However if people do have the ability to save a little, it is a real benefit for things such as rainy day funds or for the future. This means if you have an unexpected expense, having those savings takes pressure off.' Make sure you've got the best value financial deals When it comes to household finances, investments or utility bills, Weston says keeping on top of the best deals out there is crucial. 'Whether the deals are for your energy costs or anything else for that matter – make sure you've got the best value for money for the service that is needed,' Weston says. 'Also make sure you keep an eye on all those expenses and don't just let them roll over every month.' Do a household budget 'It's important to understand and make sure that your outgoings aren't greater than your income or you're going to end up with a problem and possibly in debt,' Hollands says. 'It can be very easy to build up added costs, such as subscriptions that you don't actually use, so it's important to be aware of those things through a budget. 'When designing a budget for yourself, think about the things you know are essential. This would be the cost of your housing and groceries for example. Then you have your wants, which are the luxuries and nice things to have that you could live without for a period of time. Prioritise what you need most and keep the other things to the end of your budget.' Clear up debts 'It's really important to try and clear any debts, particularly those with high servicing costs like credit cards. People of course have mortgages and other things for a longer term that they aren't going to clear right away,' Hollands says. 'However, if you're paying high levels of interest on a loan or credit cards, you really need to get those under control before starting to put money aside for the future.' Byrnes says that rounding up spare change and using it to invest could be done rather than saving this money. 'The reason that works is because investing tends to concern or scare people,' he says. Byrnes explains that the initial step of putting money into investments or the stock market can feel risky. 'However we found over the years with clients that the spare change which feels less like real money is easier rather than a big lump sum. It can also break down the barrier to investing and as time goes on, they will start to see the benefit of it without having to necessarily take a big leap with larger sums.' Automate finances in the summer months 'We have found with customers that it's actually easier to save during the winter where there is less social pressures to go out,' Brynes says. 'When we get into the summer months and various social invites such as weddings tend to pop up more – it is important to automate your finances and pay yourself first. 'This should happen on your pay date,' he says. 'Put money into your emergency fund, your savings account, your investment accounts and ensure they come out automatically on the first day you get paid. This is more successful for savings in comparison to doing it at the end of the month – especially at this time of year.'
The National
07-05-2025
- Business
- The National
It might be time for investors to look past the US stock market
After years of dominating global markets, the US stock market has suddenly gone haywire. The S&P 500 index returned more than 20 per cent in each of the past two years and some kind of slowdown was inevitable, but not like this. The sell-off began in earnest on April 2, when US President Donald Trump unleashed his 'Liberation Day' trade tariff blitz and wiped 20 per cent off US share values. His 90-day pause on April 9 triggered a relief rally, reducing this year's S&P 500 losses to only 5 per cent, but it's been a bruising experience and given Mr Trump's haphazard strategy, investors don't know what to expect next. Many investors will have outsize exposure to the country's fortunes after its stellar run of the past 15 years, but is it finally time to look past America? Others may be wondering whether now is a good time to pick up US shares at a reduced point but here's a word of warning. They're still not cheap, with the S&P 500 trading at about 20 times forecast earnings, a premium to the MSCI All Country World Index at 16 times. Like many, Jason Hollands, managing director at investment platform Bestinvest by Evelyn Partners, is wary of the US. While some of the 'valuation froth' has been removed, Wall Street is still far from cheap and is 'lurching from day to day'. Company earnings forecasts have yet to catch up with the likely impact of tariffs, he adds. 'Even with baseline tariffs of 10 per cent, there is going to be some form of negative impact. Despite the talk, no deals have been announced.' The trade war threatens to disrupt supply chains, while freight disruption could fuel inflation, and Mr Trump is still talking tough on China. Investors should brace themselves for a volatile summer, Mr Hollands says. 'It is way too soon to assume the current de-escalation rally is an all-clear for US markets.' Instead, he recommends diversifying. 'The waning of the 'American exceptionalism' theme may provide an opportunity for a more balanced approach to global investing. Europe is now back on my radar,' Mr Hollands says. Tony Hallside, chief executive at Dubai-based investment brokers STP Partners, says the US is in a spot but hasn't lost its way entirely. 'Unemployment is still near historic lows and corporate balance sheets are broadly strong.' Yet he's also wary, given 'elevated valuations, geopolitical frictions and an increasingly complex monetary policy path', as Mr Trump pressures the US Federal Reserve to cut its funds rate from today's 4.5 per cent. Mr Hallside also says the S&P 500 suffers from 'concentration risk'. 'The Magnificent Seven tech stocks account for more than 30 per cent of the index, skewing valuations and masking broader market softness. 'The US is not broken but it may not be where value lies today.' Instead, he sees opportunities in Europe, where inflation is cooling and the European Central Bank (ECB) has cut rates to only 2.25 per cent. 'That's supportive for equities, particularly cyclicals and small caps,' Mr Hallside says. Japan also looks compelling as corporate reforms drive shareholder value. Emerging markets could shine if the dollar weakens, he adds. Paul Jackson, global head of asset allocation research at fund manager Invesco, is now underweight US stocks as valuations still look stretched and a recession potentially looms. 'There are better opportunities elsewhere, notably China and Europe.' Europe could benefit from the ECB's easier monetary stance. 'The ECB is well ahead of the Fed on rate cuts, which could boost asset prices,' he says, but adds there's a risk that US tariffs could still export inflation back to Europe. Mr Jackson also sees promise in the UK, where valuations are closer to historical norms. 'The UK stock market has outperformed the US so far during 2025,' he says. UK interest rates are relatively high at 4.5 per cent but with Mr Trump going relatively easy on UK tariffs, the Bank of England may be able to cut rates more aggressively without triggering inflation, he says. Mr Jackson flags the Japanese yen as 'extremely cheap at the moment'. 'That's good news for overseas investors but brings the risk that stock prices will underperform as the yen recovers.' The S&P 500 has clawed its way back from its post-Liberation Day lows but market jitters will remain, says Vijay Valecha, chief investment officer at Century Financial. Europe is benefitting from monetary easing and valuations are attractive, but the continent still faces tariff risks. 'Key export sectors like industrials, cars and luxury goods could face serious earnings pressure if Trump does introduce 20 per cent tariffs on the EU.' The UK stands out for its dividend income. 'The FTSE 100 is expected to return £83 billion [$110.46 billion] to shareholders in 2025, with a total cash yield of 5.2 per cent, including share buy-backs. UK markets are less vulnerable to tariffs and could benefit from more interest rate cuts,' Mr Valecha says. He highlights the relative value of Japan, South Korea and India. Japan trades at a trailing P/E of only 17.8, below its three-year average, while Korea and India are also attractively valued and delivering positive returns. 'All three are proving resilient,' he says. Mr Valecha sees long-term promise in emerging markets, driven by dollar weakness and global capital rotation. 'In the coming years, a significant shift in global economic momentum away from the US and towards Asia and Europe can be expected.' However, Chris Beauchamp, chief market analyst at trading platform IG, believes it's too early to write off the US. Yes, it may look expensive, but there's a reason for that. 'This reflects the fact that companies generate higher earnings, so their shares cost more as a result.' The US has delivered spectacular returns and corrections are part of the deal. 'If you want to benefit from those gains, you also have to accept what we are going through today,' Mr Beauchamp says. A recession is possible, although Mr Beauchamp suggests it may be more like the brief Covid-triggered downturn of 2020 than the deep crash of 2008. 'If US share values fall, inflation is driven out and public sector spending is cut, that could drive flows into the private sector and unleash the next rebound. It's a process the US has been through again and again.' Mr Beauchamp notes that after the election, markets priced in post-Trump euphoria. Today, it's apocalypse. Investors need to keep their nerve both through the ups and the downs. 'The US commands 70 per cent of global market capitalisation, so you can't just ignore it. Ultimately, there is no safe-haven in equities. Investors just have to stick it out,' he says.
The Independent
30-04-2025
- Business
- The Independent
Four ways to invest in property without becoming a landlord
SPONSORED BY TRADING 212 The Independent Money channel is brought to you by Trading 212. The appeal of managing your own buy-to-let portfolio has been hit in recent years with increased taxes and restrictions on reliefs that have dented landlord profits, as well as increased regulations. The Renters' Rights Bill currently going through Parliament will also introduce tougher requirements to evict renters and limit mid-contract rent rises. All this is driving many landlords to exit buy-to-let. But the returns from property can still be attractive, especially compared with volatile stock markets. Luckily, there are ways to invest in property without the added responsibilities and headaches of being a landlord. Here is what you need to know - with plenty of options to start smaller than having enough for a full house deposit. From housebuilders such as Persimmon to property websites such as Rightmove, there are plenty of listed companies on the London Stock Exchange in the housing sector that you could put money into. You would then share in their success if the share price grows and if they pay dividends. Of course, you will also lose money if their share price drops. There are extra responsibilities with shares though. You will need to build a diversified portfolio across different sectors so that you don't lose all your money if the property sector crashes. There may also be fees to pay for holding your shares on an investment platform, which can eat into your returns. Property funds If you don't have the time or confidence to research shares, you can get exposure to the property market through property funds. These are run by fund managers who will build a diversified portfolio typically invested in commercial properties such as offices, warehouses, industrial units or shopping centres – rather than housing. Some will either invest across a mix of property sectors, others special in a narrow part of the market or a particular region. Jason Hollands, managing director of investment platform Bestinvest, said: 'Physical property funds offer investors diversification beyond equities and bonds and a stream of rental income can be useful for those who are retired. 'With many people already having significant exposure to residential property through their own home and mortgage, investing in a commercial property funds provides a slightly different dimension. Here they can benefit from the security of long leases by business tenants and accompanying rental income.' When choosing a property fund, Hollands said the quality of the tenants and the length of their unexpired leases - the longer the better - low vacancy rates and the exposure to attractive locations are important considerations over portfolio resilience. One big risk though is that property is an illiquid asset so you cannot sell in a hurry in the way you could decide to ditch some shares. Hollands added: 'A fund can't part-sell an office block or warehouse it owns and in times of uncertainty this may be difficult to achieve at a reasonable price. Open ended property funds have therefore experienced periods in the past when they have had to suspend dealing – the ability for investors to take their cash out – when large numbers of investors want to take their cash out at the same time. 'Even in stable times, such funds have to hold significant cash balances to address day to day demands for possible withdrawals which can water down returns.' There are also investment funds and exchange traded funds that invest in property stocks. Both types of property fund will have manager and platform fees to consider. An alternative to property funds are real estate investment trusts (REITs). This is a type of investment trust - backing a mix of commercial properties - that is listed on a stock exchange. Rather than your money going directly into properties, you are purchasing a share in the trust and share in the ups - as well as the downs - of its share price and market performance. Many REITs also pay regular and attractive dividends, often quarterly. Nick Britton, research director of the Association of Investment Companies (AIC), said: 'Being a landlord isn't for passive income – you will find yourself running a property business, grappling with complex tax, legal and regulatory requirements. By contrast, investing in a REIT is as easy as buying any other share. 'A particular perk is that REITs are very tax-efficient – there is no tax to be paid by the REIT itself, so if you hold REIT shares in an ISA or pension you'll effectively receive rental profits tax-free. 'Although you can sell the shares at any time, REITs should still be seen as a long-term investment. Their share prices will fluctuate and when the property market is in the doldrums, this will be reflected in the prices. You need to be patient and ideally take a five to 10 year view.' Property funds and shares can be held in an ISA, so any returns can be taken tax-free, unlike direct rental income. Peer-to-peer lending You could also fund buy-to-let or development loans directly through peer-to-peer lending platforms such as Kuflink and LandlordInvest. These can offer double digit returns for funding landlords or developers directly. However it can also be more risky and you need to check the P2P lending platform is regulated by the Financial Conduct Authority (FCA). Risks include borrowers falling into arrears and even defaulting, potentially leaving you with nothing. There is also no Financial Compensation Scheme (FSCS) protection if a platform goes bust. There are also platforms such as TAB Property that provide fractional ownership of assets such as hotels and office spaces, as well as residential property. Any returns earned from a property's income will be paid in proportion to your stake. Duncan Kreeger, chief executive of TAB Property, said: 'Fractional ownership now allows investors to enter high-grade real estate markets without the usual high minimum investment thresholds. This approach diversifies exposure and mitigates the risk of putting all your eggs in one basket. 'For anyone considering this type of diversification, my advice is to start with a clear investment plan. Determine your investment horizon and desired returns. Look for platforms offering access to diverse asset classes and conduct thorough research on each opportunity. 'Understand the terms, risks, and potential rewards associated with your chosen investments.' When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
The Independent
22-04-2025
- Business
- The Independent
What are bonds? Risks, rewards, when to buy and why they're so important
When most people think of investing, their minds will jump to the stock market. But there's another key player in investment that quietly powers economies while providing important stability for portfolios: bonds. Although generally less well understood by investors than shares, the global bond market is enormous. It's currently valued at around $140 trillion (£105tn) - more than the stock market at $124tn (£93tn). Bonds play a fundamental role in the world economy as they provide crucial funding for both governments and companies. For investors, high quality bonds - such as those issued by the UK or US governments - are seen as a safe place to earn a return on their money. Here, we look at what bonds are, their risks and rewards and why they play a vital function on the health of economies. What are bonds? A bond is essentially an 'IOU' note. When you buy a bond, you are lending money, usually to a government (government bonds) or company (corporate bonds). In return, the borrower promises to repay the money you have lent in full after a set amount of time such as five, ten or even 30 years. In the meantime, they must also pay you a fixed rate of interest for the duration of the agreed term (known as a coupon). This provides you with a predictable amount of income on your investment over a known timescale. Dividends from shares, as a comparison, can rise and fall with the stock markets. Therefore, bonds mostly appeal to investors who are looking for a stable income and a predictable final return. 'Bonds are traditionally seen as 'steady Eddies' of the investment world,' said Jason Hollands, Managing Director at wealth manager Evelyn Partners. 'They can appeal to lower risk investors and are often held alongside shares to help offset some of the risks of investing in equities.' Once they've been issued, bonds can be bought and sold on a secondary market for below or above their original price. Their price moves according to perception of how likely it is the bond will be repaid, as well as interest rates set by central banks: when interest rates rise, bond prices fall and vice versa. The yield of a bond is the amount of interest it pays to its owner, expressed as a percentage of the price. When the price of a bond falls, its yield therefore rises. For example, you buy a bond for £1,000 and it pays you £50 per year in interest. This means your yield is five per cent. If you buy that same bond for £900 (because it got cheaper), you'll still get £50 in interest so your yield is higher at 5.56 per cent. What are the risks and rewards? Government bonds are issued and backed by a country's central government. In the UK, government bonds are known as gilts, while in the US they are known as treasuries. Bonds from developed countries are considered very low risk and as a result, typically offer low interest rates. Hollands said: 'Major G7 developed market economies like the UK and US are seen as virtually free of default risk, hence UK government bonds are known as 'gilt-edged' securities. 'The UK's public finances may be challenging, but the chances of the UK government going bust and being unable to meet its obligations to borrowers is extremely low.' Corporate bonds are issued by companies and are considered riskier than gilts or treasuries, as a company's financial health can fluctuate and affect its ability to repay its debts. However, as is usually the case in investing, higher risk comes with higher potential reward. The balance of these will depend on what type of company is issuing the bond. 'Investment grade' bonds are issued by large, stable companies (such as Microsoft or Apple) with strong financials. These are considered relatively safe and therefore come with lower yields. The quality ratings of bond issuers reflect their credit-worthiness and generally range from AAA (highest) to D (lowest). 'High yield' bonds (also known as junk bonds) are issued by companies with lower credit ratings and have a higher chance of default. These are attractive to investors willing to take on more risk for more potential return. Bonds are not just investment tools; they are core to how governments finance themselves and have enormous influence over the health of economies. Governments generally spend more than they raise in taxes so they borrow money to fill the gap, usually by selling bonds to investors. Rising bond yields can increase borrowing costs for governments and slow economic growth. Gilt yields recently hit their highest level in 30 years, according to Reuters, largely in response to Donald Trump's tariffs sparking a sharp rise in treasury yields. The tariff war has prompted fears of a US recession, unusually making it seem riskier to lend to the US. In response, investors have sold treasuries in huge quantities, driving down their price and sending the yield higher, making future government debt more expensive to issue. This was seen as a driving force behind Trump being forced to step back from his initial tariff announcement, with a 90-day pause. Hollands said: 'When bond yields rise, as they have done in recent months, it is a serious problem for governments, as it puts the cost of borrowing up, meaning more of the public finances are spent on interest payments.' Bond yields also have a ripple effect on the wider economy. Yields from bonds issued by stable governments like the UK and US serve as a benchmark for interest rates. When yields rise, it signals that borrowing costs are likely to increase. As a result, everything from mortgages to business loans can become more expensive. Hollands said: 'Lower bond yields are therefore good for the economy, making it easier and less costly for governments, companies and home buyers to borrow money, whereas higher bond yields can be attractive to those looking to lock-in a better return than cash savings rates.' When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
Telegraph
13-03-2025
- Business
- Telegraph
Victory for savers as Reeves's feared cash Isa raid postponed
Cash Isa reforms will not happen until at least April 2026, giving savers another year to take advantage of the £20,000 allowance, The Telegraph understands. Rachel Reeves is reported to be considering a raid on the tax-free savings vehicle. One City firm has urged the Chancellor to slash the annual cash Isa limit to just £4,000. However, the Treasury has now ruled out reforms in the Spring Statement on March 26. Officials have suggested that changes would not be announced until the Autumn Budget at the earliest, and would not come into effect until April 2026. Financial experts urged savers to take advantage of the delay. Jason Hollands, of wealth manager Evelyn Partners, said cash Isa savers had been granted a 'stay of execution' for the coming tax year. He added: 'Given the much tougher tax environment we're in at the moment, an Isa is a no-brainer. 'Isa allowances are 'use it or lose it', so you should certainly be making the most of the £20,000 allowance before midnight on April 5 if you have the resources to do so. 'Isas are also flexible, so you can always withdraw the money later if you need it.' Ministers have signalled that they are keen on the idea of reducing the tax relief on cash Isas and redistributing the funds in a bid to boost growth. City firms have lobbied the Government to change Isas to encourage investment in shares over saving in cash. One idea proposed to the Chancellor, by fund management firm Fidelity International, is to create a single Isa for cash and shares with a lower £4,000 limit. Ms Reeves has said she wants to strike a 'balance' between money put into cash and shares. There had been speculation that the Chancellor would opt to announce any changes in the Spring Statement, which could have meant new rules coming into effect from the beginning of the new tax year on April 6. She has previously indicated that major fiscal decisions, such as Isa reform, should wait for a full Autumn Budget. More than 18 million people have a collective £300bn saved in cash Isas which allow savers to earn tax-free interest on up to £20,000 each tax year. Wealth managers have warned that cutting tax relief on cash Isas – or scrapping the product altogether – could penalise more cautious savers. Ian Cook, of wealth management firm Quilter, welcomed the delay to the Isa reforms. He said: 'It's a temporary reprieve for savers and they should take the chance to wrap any savings they have in a cash Isa. 'And with interest rates as high as they are, it's worth taking advantage.'
