The stock market 

Indicative figures covering up to 30 years. Past performance is not a guide to future performance.

As financial advisers, one of the biggest mistakes we see investors making is asking the wrong questions.

While the reason for asking them is understandable, too often, an investor’s first question is, "Which investment will provide the best returns?" or "How can I keep my money safe?" These questions make the investment journey unnecessarily complex and emotionally taxing.

Asking better questions is the first step to simplifying the investment decision. In our experience, the question that provides the most clarity is: “What's the money for?”

A simple question, yes, but this question defines the purpose of your money and lays the foundation for smart financial planning.

The Pitfalls of Aimless Investing

Investing without a clear goal is like embarking on a road trip without a destination in mind. You might encounter some interesting sights along the way, but you'll likely waste time, money, and energy making haphazard turns.

When you don't know the purpose of your money, your investment approach can quickly devolve into a jumble of impulsive decisions, trend-chasing, and knee-jerk reactions to market noise.

If you're saving for retirement decades down the line, should you really be concerned about daily market fluctuations? Your long-term horizon allows plenty of time for growth. On the flip side, if you're investing money you need for a known expense next year, a portfolio designed for long-term investors could derail your plans.

Skipping the crucial step of defining your money's purpose often leads to emotional decision-making. The consequences? Missed opportunities, undue stress, and a lack of confidence in your financial future.

Aligning Investments With Your "Why"

The solution to this predicament is as profound as it is simple: always begin by identifying your goals.

When you ask yourself, “What's the money for?” you create a framework for making informed, purposeful decisions. You are forced to grapple with the "why" behind your investments, which helps you understand your investment time frames. Clarifying your goals upfront establishes a clear direction for your investment strategy. 

This goal-oriented approach does more than just guide your investment selection. It also bolsters your resilience in the face of market uncertainty. When you know your investments align with your objectives, staying the course during temporary downturns is easier. You have the confidence to rely on a clear plan.

Your Trusted Guide on the Journey

Successful investing doesn't have to be complicated. It begins with asking the right questions. So, whenever you evaluate an investment, we encourage you to ask yourself, “What's the money for?”

We understand that translating goals into an investment strategy can seem daunting, especially with the complexities of today's financial markets. That's where a competent and caring financial adviser comes in.

By acting as your trusted guide, we help you refine your goals and craft a tailored investment plan to achieve them. We aim to bring clarity and expertise to the process so you can focus on what matters most.

Investing is not about chasing the latest trends or finding some elusive "perfect" strategy. It's about leveraging your money as a tool to build the future you desire. And it all starts with one powerful question: “What's the money for?” Your future self will thank you.

Past Performance is not a guide to future performance.  

😀 Rational optimism 😀

The media is not a friend of the disciplined and patient investor. Ignoring the key determinants of lifetime investor returns, the media focuses on short-term returns, market predictions, and negative news.

We present the following as an antidote to the onslaught of negative news:

• ​21st Century Progress​
• ​In a First, Surgical Robots Learned Tasks by Watching Videos​
• ​Seventy Really May Be the New Sixty for English Baby Boomers

📰 Read 📰

• Situational spending [2 minutes]. The urge to prioritise immediate desires over long-term needs and values.
• ​Why You Should Pursue the “Unnecessary” Things in Life [11 minutes]. Money can support purpose but cannot create it.
• ​Minimum Levels of Stress [3 minutes]. Why humans will always live in a state of stress and dissatisfaction.
• ​If you want to live a quiet life, live a quiet life [2 minutes]. The benefits of ignoring societal pressures.
• ​Why We Struggle [4 minutes]. The struggle to understand ourselves.
• ​The Mindset Shift Inspired by C.S. Lewis That Could Improve Your Finances [4 minutes]. You can't change the beginning, but you can start from where you are.
  

 🎧 Listen 🎧

• ​The 100-Year Mirror [4 minutes]. Reflections on how our spending and time use reveal our true values. 
  
  
  

🍿 Watch 🍿

🖼️ A picture is worth a thousand words 🖼️

• Visualising Major Asset Class Returns in 2024​
• ​The Pyramid of Historic Returns​
• ​Visualising the Global Population in 2035, by Generation

We hope that you enjoyed this month’s newsletter. Please let us know what you enjoyed or write back with any of your own news.

As always, we're here for you.

See you next month.

The value of an investment can go down as well as up and you may get back less than you originally invested.

The Financial Conduct Authority does not regulate taxation and trust advice.

When investing your capital is at risk.

This article is based on the opinion of Foster Denovo and should not be seen as providing advice on a suitable investment strategy, you should not take any action based on the content of this article you should seek Financial Advice regarding your own investment strategy.

Foster Denovo Limited is authorised and regulated by the Financial Conduct Authority. Registered office: Foster Denovo Limited, Ruxley House, 2 Hamm Moor Lane, Addlestone, Surrey, KT15 2SA. Phone: 01932 870 720 Email: info@ fosterdenovo.com Website: www.fosterdenovo.com