What can we expect from 2024?
I love watching films and I am also fortunate enough to work with people in the film industry.
As I stand here today, after yet another challenging year, two films spring to mind – The Big Short and The Hangover. But as we look to the future, what do they have in common for me and how are these related to personal finance?
For me, the Big Short takes me back to the start of a banking crisis that some foresaw, and many ignored. Since that period (that Summer, I recall watching the Football World Cup in Japan, Usain Bolt setting a new world record at the Olympics and Rafael Nadal finally beating Roger Federer at Wimbledon), we have endured a variety of events which have caused chaos for our health and our finances.
There has been little respite
Indeed, coming out of the clouds of the pandemic felt very much like we were entering a period that people are now referring to as ‘The Hangover’. This really isn’t connected to the content of the films (based on a group of men that all meet to go to Las Vegas for a bachelor party and then the headaches start), more the title.
And if 2022 was the Hangover Part 1 (the Ukraine War and the catastrophic Truss/Kwarteng budget having huge effects on energy prices and interest rates) and 2023 is set to be the Hangover Part 2 (terror attacks, inflation, sideways investment markets, the Israel / Gaza conflict), what can we expect for 2024 and the years to come?
Well, the answer has to be ‘no one knows’. No one can possibly know. As your financial adviser, this is probably not what you wanted to hear, but that doesn’t mean there aren’t things all of us have the power to do financially to help balance out the enduring sense of uncertainty.
Stick to the plan
The success of the National Savings product that offered 6.2% fixed for one year (which has now been withdrawn) reminds me that many of us are feeling pretty cautious. We want to see a positive return on our monies, even though these returns continue to be eroded by inflation (well done to those of you that have index linked savings accounts).
As a result, many of us are taking a closer look at investments. Querying whether you are in the right investment strategy and if there is anything else that you need to be doing is no bad thing. But we need to remember the importance of sticking to the plan. Investments are for investing long term, so you need to sit tight and ride out the storm. But I understand that ‘doing nothing’ doesn’t exactly ease the sense of nervousness many of us are plagued with.
Focus on what you can control
One of our best read articles this year was on the benefits of focusing on your budgets not your investments. It reminds us that rather than worrying too much about the investments, we need to focus on our budget and check our cash flow plan to see what we can do to help make our day to day easier to manage.
It’s a message we cannot drum home strongly enough. Why? Because our budget and our spending is something we can control and by focusing on what we can control, we not only have the ability to improve our day to day, we can go some way to counter all this uncertainty we continue to face.
If you’re in doubt about your own budgets and cash flow plan, please do get in touch, we can help.
I’m now off to rewatch the Green Mile, hoping that the John Coffey effect can have a more positive impact on the human mind.