Important | It’s our only planet.

 On the 29th March 2008 the WWF are asking all of us to turn of all essential power for 1 hour, across the world.

This is to highlight several facts.        I will be supporting it along with the rest of my Family.

I urge  you to support it as well. WWF

There is a further news story here >>

Richard Smith

The Finance Zone 0845 226 9106

Posted in Important, Uncategorized | Comments Off

The Markets – Wow

What a ride over the past few days, it seems that Volatility may be back.

China caused most of the problems or did it. Most Investment Markets have been looking a tad high over the past few weeks and with any market increase there is always a subsequent period of quiet which is where we seem to be now. Some of the falls have been made up, and this should continue.

It should serve as reminder that you should all have well balanced porfolios invested properly.

If yours isn’t you had better call.

Richard Smith
0845 226 9106

Posted in Uncategorized | No Comments »

Just a thought. Actually a couple

Quotes from one of my subscriptions services – food for thought. I hope so.

……meanwhile, people with real financial assets – stocks and bonds, mostly – have done very well. So have the people who monger these things. As Marc Faber points out, the 173,000 employees of New York’s leading financial houses made more money last year than the entire population of Vietnam, some 84 million people.

At the top end of the US financial pyramid, it is party time. The median price of a New York condo is over $1 million. Even that is peanuts in central London. There, houses have just seen their biggest increase since ’79 (more on that below). And, last year, a single art auction at Christie’s brought in $269 million – a new record. Christie’s chairman said he had never seen
anything like it.

Stopping for two cups of tea and two muffins near Waterloo station in London last weekend, and I spent just over £10. The price seemed reasonable; the little coffee-shop was full. But we wondered; how many of the world’s people can afford to live like this?

But therein hangs a tale…and lies a problem. Most people are not getting rich. Most people are barely making ends meet. Because the great boom is a fraud. It does not lift up all boats; it lifts up only the luxury yachts. Why is that? Because it is an asset-price boom, not an economic boom.

Faber quotes Bank Credit Analyst:

“Increases in asset prices do nothing to create new resources for investment as the gains can only be realized by selling the asset to someone else, who must come up with the money from somewhere. The exception is if domestic investors sell their assets to foreigners (as the US has been doing.)” lenders who package the loans and sell them to investors worldwide. As assets rise, the 1% of the population in the financial industry or with significant financial assets gets rich. New wealth is not being created; it is merely being redistributed.

Never have so few done so little and made so much doing it.

Richard Smith
0845 226 9106

Posted in Uncategorized | No Comments »

Inflation – It’s back (or is it)

The Bank of England moved to increase Interest Rates last week which is interesting as it was not expected. Lets wait and see if this move is enough. Borrowers beware – more increases are likely.

As Inflation is now seen a bit more of a problem than it was in recent months (or years), and it is always part of a cycle this round of increased interest rates should not last for long.

The ONS (Office for National Statistics) has published a Personal Inflation Calculator that you can use online in order to determine your own Rate of Inflation. The service is launched today. and can be found by following the link above.

Richard Smith
0845 226 9106

Posted in Uncategorized | No Comments »

Jan 2007 – The Year Starts – More Inheritance Tax and Planning

With interest rates rising faster than expected it has proved to be an interesting start.
Judging by our ‘inboxes’ it seems many people will be considering their options further.

I have also been asked to clarify some further points in relation to Inheritance Tax Planning:-

Firstly an upto date Will is a great starting point – noting that without one the Legal Bill on your death will soar dramatically, (I am not wishing to upset my Solicitor clients, but I know how much you are earning). Make a Will and make one now. We offer a Fixed Price Service through our Midlands based Legal Practice.

Inheritance Tax is an optional Tax in that the very wealthy and those who are organised do not have to pay it, or you can reduce it substantially and without causing to much strain or hassles. You really should take advice now if you think this will concern you. In the final quarter of 2006 I managed to save 3 clients more than £320,ooo in Inheritance Tax.

It is not difficult to mitigate, but you do need advice.

For my Small Business Clients – it is even more important you make a Will and appoint Executors that can run your Business. Not sure why this is? Then you had better contact me.

Happy New Year.

Richard Smith
0845 226 9106

Posted in Uncategorized | No Comments »

A Very Merry Christmas

What more can i say, this year has been very good to us as a company and very good to myself. I am just left hoping that the Markets will be kind in 2007 and that Gordon Brown finally gives us all a break.

Fingers crossed on that one.

As ever there are no Christmas Cards from ourselves, however we continue to support 2 African Children with the cash we normally spend on Cards and Postage. ( Surely this is money better spent?) As a further bonus I will purchase Carbon Offset Credits in the New Year to cover all of our Clients Christmas Mileage which is a furthr bonus for the planet.

It just remains for me to wish you and your family a fantastic Christmas and New Year.

Richard Smith
Independent Financial Adviser
0845 226 9106
www.thefinancezone.co.uk

Posted in Uncategorized | No Comments »

Investment Update – October 2006

What has been happening in the last six months?

Over the last six months the equity markets gave positive returns, the FTSE 100 gained 1.6%, the US S&P 500 rose by 4.1%, and European markets rose by 3.9%. However, this disguises a period of negative and volatile returns in May and June since which time there has been a steady recovery. Although May and June seemed a somewhat worrying period, in essence it was caused by a number of funds reducing their risk in response to some signs of slowing in world economies. One can only assume that this caught them by surprise and led to a decision to make their portfolios less risky. From our perspective, the most interesting aspect of this chapter was not the market reaction and volatility per se but rather the fact that after a period of very strong and sustained economic growth, there were some signs that economies were growing less rapidly.

Having been through a period of strong economic growth it is unsurprising that this has created some inflationary pressures. Indeed inflation dominated the news in this period after a number of years where quite frankly inflation has been of no worry whatsoever. The inflation has been caused by a steep rise in oil prices and many other raw materials such as metals and to some extent soft commodities. Some of this was due to “natural causes”, i.e. weather conditions damaging crops and the hurricanes in the US. But much of it was due to an excess of demand over supply and in particular the strong incremental demand coming from emerging economies such as India and China. As a result of this, central banks have responded predictably by steadily increasing interest rates to moderate growth and therefore head off any potential upsurge in inflation. Whenever this happens it always leaves central banks in a difficult position, in that they have to balance the need to curb inflation against the desire to keep the economy growing. If they raise interest rates too much, they run the risk of causing a major slow down, but raise them too little and inflation could really take hold. In the US it appears that rate rises have certainly had the desired effect and this is typified in the dramatic slow down in the housing market where there are high levels of unsold properties and the share prices of companies connected to US house building have fallen steeply. It would be unsurprising if this translated into a slowdown in US consumption as consumers feel less confident about life. Inevitably, there will be some fears that this will get out of hand and lead to recession and as the US is the largest economy, this would have a knock on effect on other economies too.

It is worth pointing out, that the UK is somewhat in contrast to the US economy as the housing market has defied the predictions of many Bears by remaining buoyant and house prices in many areas are rising once more. This is despite a policy of interest rate rises similar to that in the US.

It was thought that high levels of personal debt would cause the housing market to slow and consumption to soften but demand has remained surprisingly strong. The fact that we have experienced a period of higher household cost, ie utility bills etc. makes this all the more remarkable. As an aside, perhaps one reason for this stronger economy is that the UK is a

growing economy – by that we mean in population terms. Immigration is significant and inevitably will have an impact on the economy as large numbers of people enter the UK and obtain employment and become active members of the economy. This naturally increases demand for housing consumption and other goods and services. To conclude, stock markets have done reasonably well in the context of an environment of heightened inflation fears, higher interest rates and some signs of a slowdown in the world’s major economy. It is worth mentioning that this has not been a particularly good background for government bonds because government bonds don’t like rising interest rates and inflation fears! However, high yield and corporate bonds have been pretty resilient because they have focused more on the buoyancy of company profits and the ability of companies to service and pay back debt rather than interest rates and inflation.

What about the future? Although the media is currently full of stories about the slow down in US

housing and the possibility of a recession in the US, and the impact this might have on other economies, we believe this is unlikely or indeed if it happens, is unlikely to persist. The reason for this is that there are already signs of a softening of oil prices and commodity prices thereby removing one of the prime causes of inflationary pressure. In turn, this will allow the US authority to not only stop raising interest rates but indeed to think about cutting them. Logically this should lead to a stabilisation or recovery in those parts of the US economy that have been hurting. That is not to say that a recession is out of the question and indeed it is quite normal for markets to get very heated about some of the negatives which emerge when an economy slows down. We would not be surprised if day-to-day conditions may be uncomfortable for the next six months but inevitably the market will begin to look at the US economy in 2007 and beyond, rather than what is happening now.

Historically, we have been able to characterise the UK and the US with a similar outlook. However, as we mentioned earlier, the UK has not experienced any of the softness seen in the US and it would seem likely that not only are we facing more interest rises in the UK but also that UK interest rates would remain higher for longer. This is something for investors to consider in terms of the investments they make and their relative exposure to different economies rather than something that will dictate the overall level of markets around the world.

Overall, we still see a lot of factors that support stockmarkets notwithstanding we could potentially see a volatile period over the next six months. One of the things that are prevalent, not just in a number of markets, is the amount of money that has been put into private equity as an asset class. Private equity makes its money by buying companies mainly from the listed markets.

This money has to be spent by private equity and provides a good underpinning to markets. Indeed mergers and acquisitions activity generally remains pretty buoyant and this gives us a degree of confidence notwithstanding the fact, like many things in life, this sort of activity can be quite fickle and is driven by prevailing market conditions. Turning to bonds, we feel that with US growth moderating and interest rates possibly near a peak in general, this heralds a more benign environment for bonds. Again, the exception here is the UK and to a lesser extent Europe, where growth remains robust and we are probably someway off the peak in interest rates. But overall, we still see value in markets and sufficient opportunities for investors to profit from investing across a range of sectors and markets.

ARTEMIS INVESTOR FOCUS OCTOBER 2006

Richard Smith
www.thefinancezone.co.uk
0845 226 9106

Posted in Uncategorized | No Comments »

Mortgages and Debt

If like me you are becoming increasingly concerned and the stories in the news about Mortgages and Debt, it seems that what some of us knew years ago is now coming ‘home to roost’, with increasing numbers of people not understanding or not being able to service their debt.

I am concerned for them fortunately my clients are safe in the knowledge that they have had excellent Mortgage Advice and should not have any concerns, but if you have not then make contact.

http://news.bbc.co.uk/1/hi/uk/5340878.stm is the link to one the stories today.

If anyone you know wants advice or thinks that they may have grounds for complaint then get them to call me for some free advice.

Richard Smith
The Finance Zone
0845 226 9106

Posted in Uncategorized | No Comments »

Pensions – China – It’s got the lot.

Posted in Uncategorized | No Comments »

More News About Bad Debt

Posted in Uncategorized | No Comments »