In this issue, we discuss how you may be affected by your fixed rate mortgage deal ending, we delve into the realms of bulls and bears in relation to stock markets and finish up with some much needed good news on the National Insurance deadline extension.
This month’s featured article…Fixed Rate Mortgage Deal Ending? – Why not Consider using a Mortgage Advisor
According to figures released by the Office of National Statistics (ONS), more than 1.4 million homeowners who are due to renew their mortgage agreement this year may have to make far larger repayments than expected. This is due to the recent interest rate rises which have seen base interest rates rise from 0.1% in December 2021 to 4% in 2023.
If you are one of the 1.4 million people who will need to look into re-mortgaging due to your current fixed rate mortgage deal ending then you may be forgiven for seeming dismayed at the prospect of increased repayment values.
There is light at the end of the tunnel though. Yes, interest rates have risen but many lenders are still offering fixed rate deals, the trick is finding them.
Could a Mortgage Advisor help?:
A specialist mortgage advisor, like Sharon Kennedy at Danbro Financial Planning, can help by providing you with:
- Increased re-mortgage options due to having access to a wide range of lenders and mortgage products.
- Expert advice and guidance. A Mortgage Advisor can understand your exact financial situation and guide you to choosing the most appropriate mortgage for your circumstances.
- Save you time and effort – Let your mortgage advisor do all the leg work, they can search and source all of the best options for you and then offer advice on which ones are most suitable. This can save you significant time and stress.
- Exclusive deals – a mortgage broker can often have access to a range of exclusive mortgage deals which are not available on the high street or comparison sites.
- Support and guidance – a mortgage advisor can support you throughout the entire mortgage application process, helping you with any questions or concerns you may have and generally making the whole process go smoother.
In conclusion, using a mortgage broker when your rate maturity occurs can be highly beneficial. They can provide you with access to a wide range of mortgage products, offer expert advice and guidance, save you time and effort, provide access to exclusive deals, and ultimately give you the support and confidence you deserve.
If you are concerned about your upcoming re-mortgage and would like some advice and support, feel free to contact us here.
Your home maybe repossessed if you do not keep up repayments on your mortgage.
Bulls & Bears - stock market facts
Bear and bull markets are two different market conditions that can have a significant impact on how investors invest and manage their portfolios. Here are some key differences and how they can affect investment decisions:
A bear market is a financial market condition in which the prices of securities, such as stocks, are declining or are expected to decline. In other words, it is a sustained period of pessimism and investor negativity, characterized by falling prices, low trading volumes, and negative economic news.
A bull market is the polar opposite of a bear market, it is a scenario where stocks and other forms of securities are rising and are expected to continue to rise, at least for a while. Optimism and investor positivity are present as are the increased trading volumes and increasing cost of affected stocks and other attributes.
In summary a Bear market is where investors are more likely to sell their stocks and other assets because they believe that the prices will continue to fall, potentially resulting in significant losses.
Whereas, investing in a bull market can be a great opportunity for investors to make profits as the stock prices tend to rise. In a bull market, there is generally an optimistic sentiment among investors, which can lead to higher levels of investor confidence and a greater willingness to take on more risk.
On the surface, it would appear that making investments during a bear market is a bad idea, however there is scope to take advantage of the declining situation as it can present opportunities for those who are able to identify undervalued assets and invest for the long-term.
Reasons to invest in a Bear market:
- Lower prices: In a bear market, stock prices are generally lower, which means that you may be able to buy stocks at a discount compared to what you would pay during a bull market.
- Potential for higher returns: If you invest in quality companies with solid fundamentals that are temporarily undervalued, you may be able to generate higher returns when the market eventually recovers.
- Diversification: A bear market can be an opportunity to rebalance your portfolio and diversify your investments by adding exposure to different sectors or industries.
- Investment in companies that benefit from economic downturns: Certain companies, such as those that provide essential goods or services or those that are able to thrive during economic downturns, may be good investments during a bear market.
- Time in the market: Investing during a bear market can provide you with a longer investment horizon, potentially enabling you to benefit from compounding returns over time.
Investing in bear markets, when the stock market is generally declining, can also have some disadvantages, including:
- Uncertainty: Bear markets can be characterized by significant volatility and uncertainty, making it difficult to predict market movements and select winning investments.
- Losses: If investors purchase stocks during a bear market, they may experience significant losses if the market continues to decline.
- Psychological impact: Investing during a bear market can be emotionally challenging, leading to anxiety, stress, and potentially irrational investment decisions.
Investing in a bull market can allow you to take advantage of growth opportunities in certain sectors or industries that may be experiencing strong growth during the market upswing. However, it's important to avoid the temptation to chase high-flying stocks that may be overvalued and prone to correction.
Reasons to invest in a Bull market:
- Rising stock prices: During a bull market, stock prices are generally rising, which can provide an opportunity to generate significant returns on your investments.
- Lower interest rates: Central banks often lower interest rates during a bull market to stimulate economic growth, which can make it easier for companies to borrow money and expand their businesses.
- Momentum investing: Bull markets can be a good time for momentum investing, as stocks that have been performing well may continue to rise.
- Positive market sentiment: Positive market sentiment can be contagious, leading to a virtuous cycle of higher prices and increased optimism.
- Higher dividends: Companies may be more likely to increase their dividends during a bull market, as they have more profits to share with shareholders.
Investing in bull markets, when the stock market is generally rising, can have some drawbacks, including:
- Overvaluation: During a bull market, stock prices can become overvalued, meaning they are trading at a higher price than their true value. This can lead to a market correction, causing stock prices to fall.
- Risk of a bubble: A bull market can also lead to a speculative bubble, where investors are buying stocks based on hype and speculation rather than fundamentals. When the bubble bursts, it can result in a significant market downturn.
- Complacency: In a bull market, investors may become complacent and assume that the good times will continue indefinitely, leading to a lack of preparation for a potential downturn.
Both markets have advantages and disadvantages and no one can ensure that all of your investments are successful. It is important therefore for you to remain disciplined and not make hasty investment decisions based on short-term market fluctuations. It is always advisable to consult with a financial professional and conduct thorough research before making any investment decisions.
If you would like to discuss investments or any other aspect of wealth management then please contact us.
Your capital is at risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
On a lighter note...
Some good news with the National insurance deadline now extended
Last month, the government extended a crucial deadline for making voluntary national insurance contributions, which was good news for thousands of taxpayers (NICs).
As a result, anyone looking to maximise their retirement income has more time to fill in any historical gaps in their state pension record.
How to fill the gaps
Obtaining a state pension projection is the first step in determining your situation. It will tell you how much state pension you should receive, when you will receive it, and, if necessary, how to increase it.
The next step is to think about filling any holes in your record that the forecast has brought to light.
Making voluntary (class 3) NI contributions, which are paid at a set rate of £15.85 per week and will increase to £17.45 from next year, will enable you to do this
The current rate of £15.85 will be honoured for donations paid up until July 31 rather than the initially scheduled April 5 due to the extended deadline.
If you would like to know more about where you stand in terms of retirement planning, feel free to speak to our independent financial advisor who can discuss your retirement plans with you.
Liam Winstanley is a Chartered Financial Planner and Independent Financial Advisor. He has worked in financial services for well over two decades, specialising in wealth management and financial planning including things like pensions, investments, retirement planning, financial protection and estate plans.
Liam is the Director of Danbro Financial Planning and is passionate about delivering the very highest standards in service, ethics and professionalism within the financial sector.
Away from Danbro, Liam is an avid long-distance runner and also turns out for his local cricket side, Brinscall CC. He lives in Lancashire with his wife and son.