Investment Planning

A Short Guide to Brexit and How to Cope With Market Volatility

By | Investment Planning

Investors are understandably concerned about the impact of Brexit, regardless of the form or timing it might take. There is enough negativity and scaremongering in the press, and we can’t control the impact of Brexit over the coming years. Understanding what we can’t control and building in contingencies, however, are part of financial planning.

In this guide, we look at how your investments interact with your financial plan, and why you probably shouldn’t worry too much.


Diversification is Key

The market may experience some short-term volatility as any Brexit plan plays out. This is one of the factors we can’t control. However, a strong investment portfolio invests across the globe in different industries and sectors. Some of these may thrive in the event of Brexit. Some companies may struggle and ultimately go out of business. Others may not be affected at all.

The idea behind diversification is that you should invest in multiple assets that are not correlated with each other. In simple terms, equities and bonds often move in opposite directions depending on the economic situation at the time. This means that if share prices fall, the fixed interest element of the portfolio should provide a baseline of security and compensate for some of the losses.

In an investment portfolio, the strategy is a little more complex, but works on the same principle. Your portfolio may invest in thousands of different companies (either directly or through funds), all of which may be affected differently.

A diverse portfolio is well-positioned to absorb the worst of any volatility.


Markets are Not Always Predictable

After the Brexit vote in 2016, many investment portfolios thrived despite the uncertainty. While this was a positive development for many investors, it was partly due to the pound’s fall in value. This meant that overseas assets were valued higher, simply due to foreign currencies being worth more relative to Sterling.

Returns were further boosted, as UK companies trading overseas benefited from a weak pound.
There are gains and losses in every major political or economic shift. Even inherently negative events (such as a drop in the value of the pound) can have some benefits.


Markets are Efficient

There may be some tactical advantage to be gained by skilled investment managers, particularly in the more specialist asset sectors. However, investing all of your money in these areas is incredibly risky as they do not always get it right.

A typical, well-diversified investment portfolio may have some holdings in these funds. They will receive modest benefits from the gains, but be protected from large losses.

At the portfolio level, investors don’t really benefit from tactical decisions or attempts to time the market. It may seem like a good idea to sell your investments or switch funds, but chances are that several thousand other investors have also had the same idea.

Information is so readily available today, that any data that may influence your decision to buy, sell or hold is already priced into the market.

This means that any decision taken now, with the aim of benefiting (or at least not losing money) from Brexit, is likely to be detrimental in the long term.


Historic Trends

There were times between 2008 and 2010 that it seemed like the world was ending. Funds, companies, banks and economies collapsed. Investors lost millions, and years of austerity followed, with many people still feeling the impact.

When we look at fund performance charts ten years on, this devastation is reflected as a small blip in an otherwise upwards trajectory. Most investors are vastly better off having had faith in their investment strategy and not panicking.

A feature of an efficient market is that it is impossible to know when to buy and sell. An investor could, in theory, sell their assets at the high point just before the crash, before reinvesting at the lowest point to benefit from the low prices and subsequent recovery. The problem is that no one actually knows when the high and low point will occur.

For most investors, it is far more beneficial to trust the markets than to try and make these decisions.
Your Risk Capacity

Of course, there may be some losses in the short term, and some investors simply cannot cope with that. Personal tolerance and capacity for risk is a key discussion point at our meetings with clients.
Keeping calm and staying the course is the best advice for most clients.

But for others, the idea of losing even a small amount in the short term is a worry. The idea of long term returns and keeping pace with inflation does not really help when someone has just retired, as early losses could throw their plans off-track.

This is why we take the time to get to know our clients and understand their worries as well as their financial situation.


Your Long Term Plan

Investment decisions should be taken as part of a wider financial plan, rather than in isolation.
A young investor with high earning potential can afford to take significantly more risk than a retired person living on their pension. There are numerous other factors to take into account, and every client is unique.

Part of financial planning involves planning for the worst. For example, keeping an easily accessible cash reserve means that you can cope with any emergencies and will not need early access to your investments. Any investment withdrawals should be planned in advance as far as possible.

When we create a financial plan, we do not aim to avoid difficult events as this would be impossible. Instead, we plan for the risks, and ensure that even if the worst happens that you can still achieve your goals.

Please do not hesitate to contact a member of the team if you would like to find out more about our investment proposition and how we manage volatility.

Investing to Eradicate Inequality: Can it Work?

By | Investment Planning

This is a huge question and an important one. Many of us want to put our capital to good use whilst also reaping financial rewards along the way, and several voices in the financial world claim this is possible. Yet many people would argue that investing, by its nature, works against the cause of equality. Who is right?

At WMM, many of our clients have expressed a desire to know more about the relationship between investing and equality. As financial planners covering Oxford (a University city), we understand this subject is important to many people who live here; as well as across the UK. Here is our brief attempt to articulate our perspective.

Please note that this content is for information purposes only, and should not be taken as financial advice. To receive such advice please contact one of our independent financial planners here in Oxfordshire.


Defining Inequality

Of course, before we can judge whether investing broadly helps or hinders equality, we need to agree on what “equality” means. This is by no means an easy task; indeed, entire PhDs and academic careers have been built on answering this question!

For instance, does equality primarily refer to individual income equality, or equality of employee influence over strategic decisions in the workplace? Does it refer to gender equality in the company boardroom, or to ensuring that no single company can dominate a particular market and so prevent other companies from realistically getting a look-in (e.g. think of Google and the UK search engine market, where in 2019 no other business comes close)?

Moreover, does equality mainly refer to equality of outcome or equality of opportunity? The university debate is a classic example here. For instance, should everyone realistically have the same opportunity to go to university if they so choose, or should the decision be governed by academic ability or wealth?

Rather than try to answer all of this definitively, here we will be focusing primarily on investing regarding two main “equality of outcome” areas: income equality and gender equality.


Investing & Gender Equality

It’s worth noting at this point that some people will simply never see investing as compatible, or helpful, with regards to equality. For instance, Marxist thinking typically perceives investing as inherent to the capitalist system, which is fundamentally incapable of creating a fair society. We understand these views, but assume that if you are reading the thoughts of an Oxford financial adviser, then your political-economic views fall at least somewhere more towards the centre ground! Certainly, we at WMM believe that in many cases investing can be leveraged to achieve moral principles whilst providing a strong return for the individual investor.

Consider gender equality as an example. Broadly speaking, in 2019 company boards across the western world are still largely dominated by men. This is clearly an area where more progress needs to be made, at least in line with other spheres where women have climbed hierarchies to achieve top executive positions (e.g. media and entertainment). In fact, investment firms can be some of the worst performers here, with women comprising about 4% of the top jobs.

Yet there is strong evidence to show that gender diversity in the boardroom is strongly correlated with higher investment returns. This naturally puts internal pressure on such firms to bring more women into senior positions; after all, the more money investment firms can make for their clients, the more successful they’re likely to be! At the same time, clients of investment firms can apply moral pressure by demanding greater gender diversity from such companies.


Investing & Income Equality

This can be quite a complex and emotional topic, and on the surface it can seem like investing naturally creates large income disparities. After all, we’ve all seen the headlines about UK banker CEOs who earn as much as 120 times that of their average employee.

Of course, here we start to enter the classic debate: “Should such CEOs earn more than their employees due to their role and responsibilities, and if so, how much more is acceptable?” Most people we speak to seem to take a balanced view, which we would broadly agree with. People in higher positions who deliver more value should be paid more, but their employees should be paid a good living wage, and efforts should be made to close excessive, unnecessary income disparities between the “top and bottom” of the business (e.g. lavish, undeserved bonuses).

In this respect, investing can make a positive difference; moving companies towards income equality without achieving an unrealistic goal of complete income parity. Again, a big part of this change can come from clients of investment businesses, who can increasingly expect such companies to promote fair wages internally, to set an example regarding director bonuses, and bring employees more into the business as stakeholders (e.g. think of John Lewis’s “Employee Ownership” approach). Clients can also apply more pressure on these investment companies to prioritise investments into companies and funds which also take a similar approach to their internal structure, as well as to the businesses and individuals involved in their supply chains.


Final Thoughts

At this point you have likely noticed that this is a huge topic, and we’ve barely been able to scratch the surface here in this article! The good news is, individual investors can make a positive difference to address the numerous risks associated with inequality, and also benefit from the advantages of doing so.

If you are interested in finding out more about sustainable, ethical or environmental investing or would like to develop your portfolio, then we invite you to get in touch. At WMM, we can offer a free, no-obligation consultation to get to know each other, and bring some clarity to your financial situation and goals. You can reach us on 01869 331469


A Short Guide to Passive Investing

By | Investment Planning

If you’re new to investing then you might be confused about how it exactly works. Perhaps you’re vaguely aware that it involves setting money aside regularly over a long period (e.g. 10+ years) into companies, funds and other assets which causes your net worth to grow. You’d be right, but how does investing lead to wealth growth?

Broadly speaking, there are two main approaches to investing, often referred to as ‘active’ and ‘passive’. In this short guide, we will be explaining the difference between the two, and outlining WMM’s reasons for primarily advocating the latter approach when it comes to constructing an investment portfolio for our clients.

We hope you find this guide helpful, and if you have any questions about your investments then we invite you to get in touch to arrange a free, no-commitment consultation with one of our financial advisers here at WMM.


Active & Passive: An Overview

When you put your money into a UK deposit account, it wasn’t too long ago when you used to be able to expect a reasonable return earned via interest; in some cases as high as 6%. Today in 2019, however, you’re lucky if you can find anything close to a 2% interest return. When you factor in the fact that inflation, at the time of writing, sits at around 1.7%, making any money at all on cash investments is difficult. Most people are losing money in real terms.

This situation has encouraged many people to consider investing, to increase their prospects of growing their wealth and retirement savings over the long term. However, most people do not have the confidence, experience, risk appetite or resources to invest “Dragon’s-Den-style” into individual companies. So what are your options?

For most people, the primary route available to you is to consider investing in “funds”. This essentially involves pooling your money together with other investors, which is then invested into multiple companies or assets. The investment returns are then distributed amongst the investors according to the amount committed as well as the performance of the investments.

For instance, suppose you invest some of your money in a FTSE 100 tracker fund (along with other investors). This fund follows the performance of the UK’s biggest 100 companies, and averages the shares of all of these companies to produce an index. If the index goes up, then your investment produces a higher return. If it goes down, then so does your investment.

This is the essence of “passive investing”, since it involves committing your money and “holding” it there to follow the index(es) you have chosen. It’s worth noting that a portfolio containing passive investments should really involve multiple tracker funds to spread out the investment risk (i.e. “diversification”), and the investor is in essence seeking to capture the ‘Market Return less costs’.

The passive approach to investing is quite different to the image many people have in their minds, when they think about investments. Quite often, the popular image is of a fund manager who spends every day investing in certain companies and pulling money out of others, to try to “beat the market” for clients. This is known as active investing.


Pros & Cons of the Approaches

Depending on your experiences, beliefs and background you might be more inclined towards active or passive investing. At WMM, we want to be fair in outlining the advantages and disadvantages of both approaches, but also put our cards on the table and state that, in general, passive investing tends to offer a higher likelihood of increasing a client’s net worth over the long term.

Here are some of the points in favour and against active investing:


  • Active investing is often considered to be quite flexible, as you are not limited to a predetermined set of investments (as you tend to be when picking tracker funds).
  • Active investing has shown some prominent cases of generating strong success stories for their clients. For instance, in 2013 Apple dropped to less than $60 per share. Many active fund managers anticipated the dip and invested clients’ money into Apple whilst it was low. By 2017, Apple has risen to $150 per share.


  • Investment management fees tend to be higher with active fund managers. These fees can significantly eat into an investor’s returns over the long term.
  • Even the best fund managers struggle to consistently beat the market over many years. In fact one study by the Pensions Institute showed that between 1998-2008, only 1% of active fund managers produced returns which overtook their costs.

Let’s now consider some of the pros and cons of passive investing:


  • As mentioned, passive investing tends to carry lower expenses than active fund management, which tend to lead to more money in investors’ pockets. The lower cost is generally because a tracker fund does not need to employ an active fund manager to buy and sell stocks each day.
  • Passive investing mainly follows index trackers, which represents the aggregate wisdom of millions of investors regarding the share value of the companies concerned. By and large, this means that the true value of most companies’ shares is already priced in. This makes financial markets in the developed world quite robust, meaning it is harder for active fund managers to get an edge. This allows the passive investor to potentially benefit from long-term growth without needing to constantly monitor their portfolio.


  • Passive investing is, by nature, more of a “buy and hold” approach to investing, which can sometimes lead to missed opportunities which might be open to the active investor (think of the Apple example above, between 2013-2017).
  • Sometimes passive investors can become complacent, adopting a “set and forget” approach to their portfolio. This is dangerous, as even a predominantly passive investment portfolio will need to be reviewed at least once a year to ensure everything is still on course towards its investor’s financial goals.

This article is for education, inspiration and information purposes only. It was intended to explain common Investment approaches in a very simple light. In fact, the term ‘passive’ is an often misused term covering certain investment funds which are to an extent actually ‘active’ but for specific reasons. Therefore this basic content should not be taken as investment or financial advice. To receive regulated, tailored financial advice regarding your situation, or to find out more about WMM’s investment philosophy then please contact one of our financial planners.


A Short Guide to Environmental Investing

By | Investment Planning

In previous posts here at WMM, we have discussed (in broad terms) what environmental investing is, how it has developed in recent years and how people can get started with social impact investing or “ESG investing” (Environment, Society & Governance).

As clients and readers of our blog have expressed more interest in this subject, we thought it would be helpful to go into a bit more detail. Here, we’ll be sharing five broad strategies when it comes to ESG investing, which you may want to consider with your financial adviser.

Please note that this content is for information and inspiration purposes only. It should not be taken as financial advice or investment advice. To receive such advice, please consult an independent financial planner here at WMM (in Oxford) or closer to your location.


Five ESG Investment Strategies

#1 Non-ESG Exclusion

This approach can probably be described as the “purist” approach to ethical and environmental investing. Under this strategy, you work with your investment manager to “rule out” specific industries or sectors (e.g. oil extraction), countries or businesses (e.g. those producing high levels of CO2 emissions) from your investment portfolio, using ESG principles are your guide.

The advantage of this approach is that it allows many investors to align their ESG values firmly with their investment strategy. The potential drawback, however, is that this approach can limit your options when it comes to building a balanced portfolio which not only appropriately diversifies (in order to mitigate risk) but also holds the potential for strong returns.

#2 Leader Screening

Some investors might be comfortable committing their money towards companies in industries which the former strategy would exclude, on the basis that these businesses are showing a high ESG performance in relation to others in their sector. For instance, under this approach, an investor might be happy to invest in car manufacturers which are leading the marketing in electric car manufacturing, relative to others in the automobile industry.

The advantage of this strategy is that is can help incentivise companies in a wider range of industries to pursue ESG principles. The drawback, however, is that this approach might not fit as neatly with an investor’s ESG values compared to the first approach.

#3 Integration

Under this strategy, ESG investments are gradually incorporated into an investor’s portfolio alongside more traditional, non-ESG investments. The exact balance between the two types of investment might vary from person to person, depending on their distinct investment goals and their personal tolerance to investment risk.

This approach can be attractive to investors who wish to start exploring the world of ESG investing, without necessarily going “all in” (which might feel too risky or uncomfortable). It also gives the opportunity to learn more about ESG investing via direct experience, in an investor’ portfolio. On the other hand, this approach to ESG can feel too “watered down” to some people.

#4 Impact Investing

There are certain companies in the world which exist specifically to address certain issues pertaining to the environment or society. Examples include firms which offer storage for renewable energy sources, such as wind or solar power. Through an impact investing approach, an investor can focus their money on these types of companies to generate a positive return, whilst making a positive difference.

The attraction of this approach to ESG investing is that it is not simply about “damage limitation” regarding the environment. Rather than just investing in companies which are trying to reduce their carbon footprint, this strategy involves focusing investments on businesses which are actively trying to reverse the problem. This can feel tremendously exciting.

However, this type of investing needs to be navigated carefully with your investment adviser or financial adviser. This is particularly because many companies which qualify as impact investments are also innovative startups, which tends to carry higher investment risk.

#5 Ownership / Direct Engagement

Another way to influence different companies towards adopting an ESG approach is to directly engage with them. This doesn’t necessarily mean standing outside of their offices with a placard, by the way! Rather, it involves using tools such as shareholder power to bring ESG principles more onto the board’s agenda, and influence positive change.

If you are a company shareholder yourself, then you might consider doing this in consultation with a professional adviser. On a wider scale, however, you could adopt this approach by investing in funds and financial products which apply this influence to companies, on your behalf, at the executive and board levels. This approach can be attractive to many investors. Its drawbacks include limits to the range of products and funds which currently do this, although it would be fair to say that the direction of travel is towards growth in these opportunities.


Final Thoughts

As you can see, there is a range of approaches to ESG investing. Each strategy holds out its own respective pros and cons, and will likely vary in appeal depending on each investor’s distinct goals, circumstances, values and attitude to risk.

Many people might be interested to have learned the difference between “ESG investing” and “social impact investing”, after reading the above. The former can be described as an “umbrella” term, which refers to investment approaches which factor ESG principles into their portfolio to varying degrees. The latter goes further than this by actively investing in companies which seek to not only reduce their own negative impact on society and the environment but also make a positive difference via their products, services or solutions.

If you are interested in learning more about how you could integrate an ESG approach into your own investment portfolio, then we’d be delighted to hear from you. Get in touch today to arrange a free, no-commitment financial consultation with a member of our team:

01869 331469
Castle Farm
The Stableblock,
Clifton Road, Deddington
OX15 0TP


5 Books to Read on Social Impact Investing

By | Investment Planning

Ethical investing has become more mainstream in recent years, particularly with the rise of millennial investors – many of whom are concerned about how their finances impact the planet.

Here at WMM, some of our own clients have approached us to ask if there are any good books, resources or articles which could help them educate themselves further on the topic of “Social Impact Investing”. In this post, we intend to offer some suggestions.

Please note that this content is for information and inspiration purposes only, and should not be taken as financial advice. To receive regulated, personalised financial advice into your own financial affairs and goals, please consult an independent financial adviser.


#1 Impact Investing: Transforming How We Make Money While Making a Difference (2011)

If you’re interested in knowing more about the history and evolution of social impact investing, then this book by Bugg-Levine and Emerson comes generally well-recommended. The language is not too laden with jargon, allowing it to be fairly accessible to readers who perhaps are not so confident with investment terminology.

Moreover, the book is broken up quite nicely into quite manageable chunks, which helps make it enjoyable to read (as you feel that you are progressing through it). There are also some fascinating topics within the book which are very much worth looking at, including “Impact Investing and International Development” and “How Will We Save The Forest And The Trees?”.


#2 Investing with Impact: Why Finance is a Force for Good (2015)

This work by Jeremy Balkin takes a slightly different line to the one above. Rather than focusing on the history of social impact investing, it rather addresses, head-on, the common popular perception of the financial sector as a primarily negative force when it comes to social, ethical and environmental change.

Standing at around 136 pages, this book is quite quick to read and is nicely broken up into 6 short chapters – each with a compelling title such as “The Blame Game” and “Reimagining Prosperity”. If you are interested in finding out more about how money can be used positively to impact the world, then this is a good resource to consider.


#3 The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism (2014)

If you’re looking for something much more “meaty” and academic on the subject of social impact investing, then this book by Clark, Emerson and Thornley might be worth a look. Be aware, however, that with 291 pages of fairly technical writing, this is not for the faint of heart!

This book puts more of its attention on the strategy and organisation of companies, funds and investment managers who work in the field of social impact investing – suggesting ways to make improvements to the overall system. It is split into three main sections: “Part I: Key Practices and Drivers Underlying Impact Investing”; “Part II: Four Key Elements to Social Impact Investing”; and “Part III: Looking Ahead: Trends and Challenges”.


#4 Invest for Good: A Healthier World and a Wealthier You (2019)

If you’re looking for a book about social impact investing which contain more stories, dialogue and experiences of investors actively working in this field, then this book by Mobius, Hardenberg and Konieczny is quite an entertaining read.

The book contains many anecdotes which can, at times, be amusing whilst also revealing some compelling points about ESG investing. One interesting theme throughout is the authors’ notion that the future of all investing, they argue, lies in socially-responsible investing. So if you’re on board with that idea, this book might be for you!


#5 Building Social Business: The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs (2011)

Muhammad Yunus (the author of this book) is a fascinating person in his own right. A social entrepreneur from Bangladesh, he received the Nobel Peace Prize for his work in establishing the Grameen Bank – a microfinance initiative which issues small business loans to people in Bangladesh, without demanding collateral (e.g. securing against the borrower’s house).

This work is a fascinating and inspiring vision of what the world could be like if capitalism was reformed to focus on the idea of “social business”. This vision outlines a way to build enterprises which are profitable and which produce economic growth, on the one hand, whilst meeting essential human needs on the other.

Standing at just under 200 pages and written in quite an accessible style from a first-person narrative perspective, this offers a unique and interesting read. We’d love to hear your thoughts on it if you decide to read it!


Final thoughts

ESG and social impact investing are fascinating subjects, containing much to explore from a range of different angles. It’s worth stating that we do not necessarily endorse everything contained in the books we’ve suggested to you above, but believe they can help inform and inspire you as you develop your own thinking on these fascinating subjects.

As always, here at WMM we would love to speak with you if you are interested in social impact investing, whether that’s starting a new investment portfolio or developing an existing one which you already possess. If you’d like to get in touch, then contact us via phone or via this website to arrange a free, no-commitment financial consultation with a member of our team today.


Investing & Inflation: A Short Guide

By | Investment Planning

This content is for information and inspiration purposes only. It should not be taken as financial advice. To receive tailored, regulated financial advice into your own financial affairs and goals, please consult an independent financial adviser.

Inflation is generally understood to refer to the overall rise in prices, over time, within a given economy. If something (e.g. a dress) costs you £100 in 2019 and inflation rises by 2% twelve months later, then it would cost you £102.

In other words, the same amount of money (e.g. £100) gradually loses its “spending power” over time, with rising inflation. This is important when it comes to investing, as inflation can potentially eat away at the returns you are getting on your savings or investments.

Indeed, this quite often happens without many people realising. For instance, at the time of writing, Which? did some research to show that you would be lucky to get a bank account (unlimited-withdrawals) with a 1.5% interest rate. Yet UK inflation in June 2019 stood at 2%.

What that means is, you might commit, say, £1,000 to an account like this believing it would eventually grow to £1,015 by next year (i.e. 1.5% growth). In real terms, however, your £1,000 would be losing its spending power since inflation (2%) is 0.5% higher than your interest rate.

This isn’t to say that you shouldn’t have an instant-access savings account, with unlimited withdrawals. This can be a useful way to store emergency or short-term savings, for instance, which you might need to access quickly.

However, it does highlight the hidden eroding power of inflation on our savings and investments. In particular, if you want the money in your investment portfolio to grow over time, then you need to ensure that your investment strategy factors inflation into the picture.

After all, if you can regularly generate investment returns which beat inflation, then your money is not only going to grow on paper – but also in real terms. If inflation is 2%, for instance, and your investments grow by 8%, then your money has ‘real’ growth of an impressive 6%.


Investing to Beat Inflation

Of course, your primary goal when investing should be to beat inflation – but it’s typically an important “pillar” within your overall plan. If your main goal is to grow your wealth, then naturally, regularly beating inflation will be crucial. On the other hand, if your main goal is to preserve the wealth you have accumulated, then you will likely still want your money to at least hold its value as much as possible over time, and not be eroded by inflation.

The challenge is, it’s not possible to accurately predict what the level of future inflation is going to be. When you look back over recent UK history, there has been quite a lot of variation:

  • 2% in June 2019
  • 5% towards the end of 2011
  • 2% at the beginning of 2008
  • 2.96% in 2000
  • 9.46% in 1990
  • 17.99% in 1980 (largely due to a recession)
  • 6.4% in 1970

It’s worth stating that the Bank of England was set up primarily to keep inflation low. So there is a strong reason to assume that we will not see inflation skyrocket to some of the figures seen above, any time soon. However, this is not guaranteed and certain events (e.g. a major change in the economy or government policy) could lead to a rise.

One of the main ways investors try to beat inflation with their investments is to incorporate some “Higher-Risk; Higher-Return” assets into their portfolio. These assets tend to pose a greater risk of generating a negative return on your original investment, but also possess the potential to generate a higher return which can beat the rate of inflation.

Investing in companies (either directly or via funds) is a good example of this approach. This is because many businesses (e.g. infrastructure and energy companies) can raise their prices in line with inflation to cover their costs. Theoretically, this can allow them to continue growing even as inflation rises.

This forms an important reason behind why even the most “defensive” or “conservative” investment portfolios (tailored to preserve wealth) often incorporate a degree of equities, rather than simply relying on fixed-interest assets such as bonds. This is because the interest you generate on a bond may not keep up with rising inflation, even though many bonds (i.e. “IOUs” issued by governments and companies) are generally seen as “lower risk” than equities.


Final Thoughts

There is no universally-agreed answer to the question of why inflation rises at different speeds over time. Yet it is generally accepted that a sound investment strategy should incorporate assets and tactics to mitigate inflation, and even attempt to beat it. It is very important to know the level of investment risk you feel comfortable with, but equally important to know as well is the level of investment return you need to meet your lifetime goals. People often overlook the risk of not reaching or having to compromise on their goals, because they avoided some level of investment risk.

If you are interested in discussing your own financial plan with us in light of the above discussion, then we’d be delighted to hear from you. Please get in touch to arrange a free, no-commitment financial consultation with a member of our team here at WMM.

Can investing be an answer to climate change?

By | Investment Planning

Over the last 100 years, the earth has warmed by about 1˚C. It might sound insignificant, but when you consider the effect that future planetary temperature rises are likely to have, it is certainly important:

A further rise of 2˚C is predicted to result in eradication of the Arctic seas ice during summertime, leading to faster rises in temperature (since there is less ice to reflect sunlight away from the earth). Violent storms and floods are likely to increase across the world, especially near the coasts. Acidity rises in the seas, killing coral reefs and krill.

Exceeding this 2˚C rise would almost certainly be devastating, leading to rainforests eventually being wiped out, rises in sea levels as the ice in Antarctica melts, huge human displacement and widespread elimination of species groups.

To many people, this prognosis can sound highly alarming and insurmountable. Some people deny humans’ contribution to the rise in global temperatures, but we here at WMM accept the prevailing view within the scientific community that a low-carbon worldwide economy is key to addressing the situation, before catastrophic irreversible damage is caused to the environment.

Assuming you agree, what can actually be done? Normally, answers to this question point to the importance of taking personal responsibility for important areas of our lives such as food consumption, energy use (particularly those reliant on fossil fuels) and responsible waste disposal. Less often, however, do we tend to think about investing.


How investing affects climate change

Yet the subject of investing is incredibly important. Consider, for instance, that just 100 companies are largely responsible for 71% of global CO2 emissions between 1988 and 2015. These businesses are backed up by many wealthy investors, which finance their ventures.

So, if you are looking to build a strong investment portfolio but also make a positive difference towards climate change, how should you approach companies like this? Should you avoid them altogether and commit your money into other, more sustainable businesses, or should you invest in them with an aim to influence them towards taking greater care for the environment?

This is where we get onto the subject of “impact investing.” Broadly speaking, this approach to investing seeks to generate a financial return whilst making a positive contribution to society, governance or to the environment. On the subject of climate change, for instance, impact investing would involve investing in companies or funds which are either reducing their CO2 emissions, or which are proactively working towards a low-carbon economy (e.g. renewable energy businesses).

Impact investing is, therefore, different from “traditional” investing which historically tended to simply focus on investment returns, with little care for an investment’s impact on the world. It is also different from philanthropy, however, which usually cares little for investment returns and rather focus simply on changing the world.

At WMM, we and other financial planners are excited by the idea that you can combine investing with noble, philanthropic aims, such as creating a more low-carbon world.


How to build a “planet-positive portfolio”

So, how can you incorporate more of an impact investing approach into your wider portfolio? Broadly speaking, you should look at two things: look at “green funds”, and take a look at different funds’ strategic approaches when it comes to investing and climate change.

For instance, some funds might focus on offering investments into bonds or shares of companies which actively work to reduce CO2 emissions e.g. Green Bond Funds.

Other funds will not necessarily only focus on companies like these, but rather include companies from a wide range of sectors/industries which are trying to lower their carbon footprint, such as agriculture as waste.

Regardless of which approach you feel is better, the important thing to remember is to diversify your investments and not put all of your eggs into one basket. As much as you might believe passionately in the work that one company is doing to help the environment, please remember that it is still a company and it has the capacity to fail and lose you money.

By building a strategic portfolio with a well-balanced range of funds, you can make a positive difference to the world whilst minimising your investment risk exposure.



The world is facing some dangerous environmental threats, but we also live in exciting times regarding advances in green technology to try and address them. Innovations in wind, solar and geothermal production and distribution come to mind, as well as those in vital infrastructures such as electric/hybrid cars and clean power cells.

The important thing to remember with impact investing, however, is to maintain a healthy balance between its two tenants: generating a return whilst making a positive contribution to the world. It’s important to not lose sight of one whilst focusing on the other.

A fund might well be “green”, but if it is full of poor-quality stock and is constructed badly then you risk exposing yourself unnecessarily to the effects of poor performance. On the other hand, a fund might perform very well but gradually lose sight of its original intention to focus on companies which are minimising emissions (either their own, or overall).

A good financial planner will be able to help you keep an eye on these things, also ensuring that your investment strategy is on track with your own personal financial goals whilst continuing to make a positive environmental impact.

If you would like to speak to us about starting an impact investing strategy, then get in touch to arrange a free, no-commitment consultation with a member of our team.

Can ESG Investing Boost Your Returns?

By | Investment Planning

If I try to invest my money ethically and responsibly, will I lose money? This is a question our financial advisers often hear in and around Oxford, and we’d like to address it here.

In our previous article: “What is sustainable investing? A short guide”, we talked in more detail about what ESG investing is, how it works and how investors can start implementing this approach more into their portfolios.

In this article, we’ll be looking more specifically at the personal, financial pros and cons of an ESG approach to investing. To quickly recap before we dive into this subject:

  • ESG stands for “environment, society and governance”, and refers to a style of investing which seeks to create a positive impact on these aspects of our world.
  • An example would be investing in a company which seeks to minimise its carbon footprint or address resource scarcity (E); mitigate labour/employment issues such as health and safety standards (S); and/or one which promotes transparency or gender diversity within corporate boards (G).

So, does ESG actually work from an individual investor’s point of view? Let’s look at that below. Please note that this content is for information purposes only, and does not constitute financial advice. Consult with an independent financial adviser prior to making any big investment decisions, such as those concerning ESG.


Does ESG work?

There is still a prevailing view within much of the financial services industry which goes something like this: “The top priority for an investor is shareholder value; investing for any other reason is simply going to lead to a terrible return.”

In other words, the argument goes that if you prioritise ESG issues when choosing your investments, you are essentially going to lose money. But is that actually true?

The answer is not a clear “yes” or “no”, but rather “it depends”. Certainly, there are cases where investing in a certain ESG fund or company would lead to a poor return for you, perhaps because their fundamentals are poorly set-up.

However, we would argue that in many cases it is possible to incorporate ESG into an investment portfolio with only a tiny reduction in performance. Sometimes, it can even be done with no sacrifice to your investment returns at all.

Remember, ESG is not a one-size-fits-all approach to investing, and you can implement it to a greater or lesser degree into your portfolio. It’s not necessarily an all-or-nothing choice, potentially involving a huge sacrifice in your investment returns. Speaking with a qualified financial planner will enable you to identify the degree to which you can safely transition to a more ESG investing approach, and ascertain the timescales and manner in which to do this.


Pros of ESG

There are many positive reasons to consider adopting more ESG investments into your portfolio. One important one is satisfying your own desire to feel good about your decisions. Simply put, it can feel immensely personally rewarding to know that your money is not only working towards your own future, but is also contributing to a better world.

Another important thing to consider is the long-term future of ESG itself. Whilst some have expressed the idea that ESG is a passing fashion (like green juice), the weight and scale of the worldwide movement towards ESG strongly suggests that it is here to stay.

The 2008 financial crisis provided a big wake-up call in the Western world for more systematic, good governance. Climate change is also not going away anytime soon, and ESG-conscious demographics such as Generation X and millennials are increasingly driving calls for solutions to these kinds of global challenges across the board – including in the world of investing and financial services.

Moreover, there is some evidence to suggest that there is a correlation between companies which “do well” financially (therefore, also for shareholders) and which “do good” in the way they conduct themselves and operate. This isn’t to say that all ESG investments are destined to success and provide a return – this is not guaranteed. All companies have the capacity to fail. However, there is something to be said for the argument that businesses which treat their staff, consumers, resources and environment with respect can result in strong fundamentals which often give them a strong foundation for long-term success.


ESG Cons

Whilst we are generally very positive about ESG investing here at WMM, it’s important that we try to be balanced and highlight some important aspects of this approach which can be disadvantageous to the individual investor.

Perhaps the primary danger of ESG investing is that you start to focus more on changing the world in your investment decisions, rather than on your personal financial goals. Whilst it is a noble thing at times to be self-sacrificial for the greater good, it does no one any favours to scupper your pension income, for instance, by neglecting your investment performance.

Proper ESG investing, of course, involves balancing these two important goals at the same time: achieving personal investment goals whilst making a positive ESG impact. Here, this is where working with a financial planner can offer you a lot of value. They can help you keep an eye on the companies and fund you are invested in, monitoring not just performance but also whether they are staying true to their professed ESG values.

Of course, it is also possible that by focusing solely on ESG investments, you miss out on a number of great investment opportunities elsewhere which hold out the potential for a better return. In these cases, perhaps you might want to discuss with your financial planner about how to balance your portfolio so that it includes some strong ESG elements whilst retaining some non-ESG components for specialist reasons or perhaps greater investment potential.

Or, perhaps you are willing and able to forsake an investment for the sake of the moral cause you believe in. Again, by consulting with a professional adviser you will be able to talk through these issues more carefully together, making an informed decision based on the best possible information available to you – rather than on emotion or gut feeling.

Can investors help to stop modern slavery?

By | Investment Planning

The phrase “modern slavery” tends to bring up all sorts of unpleasant images in our minds about forced labour, sweatshops and sex trafficking.

Few of us tend to associate it with the word “investment” or “financial services”, however.

Yet it is not just industries such as agriculture and apparel which involve this kind of exploitation. Financial services are exposed to it as well.

In this article, we’re going to explore some of the links between investment and modern slavery, and suggest some ways you can not only put your money to profit – but also towards making a real difference in the world.


Modern slavery: an overview

Many people simply are unaware of the scale of the problem of modern slavery. Globally, it is estimated that there are at least 40 million people living in “slave-like” conditions today. That’s actually more slaves than there were during the time of William Wilberforce, and the abolition of the transatlantic slave trade.

“Modern slavery” includes a number of inhuman practices such as debt bondage, human trafficking, deceptive labour recruitment, labour bondage, and child labour. Usually, people living in these conditions are exposed to regular threats, power abuses, violent acts, freedom deprivation and coercion.

Countries with a high prevalence of modern slavery include places like Somalia, Mauritania, Iran, Myanmar, Thailand and Cambodia. In fact, nearly two-thirds of the world’s modern slaves live in Asia or the Pacific regions.

Yet the Western world is not immune to the presence of modern slavery, despite various laws and norms to try and prevent it. In the UK, for instance, it is estimated that over 136,000 people lived under modern slavery conditions in 2018. Much has been done in the UK to try and address the problem of modern slavery, yet there is still more work to do.

Environments in the UK where you are more likely to encounter people living in these conditions include nail bars, car washes, cleaning areas and factories. So one way to make a difference is to keep an eye out when visiting these places and pay attention to the pricing. If your cash wash is going to cost you £5, then ask yourself if the workers there are really being paid fairly.

Yet is there more that investors can do to make a difference to help people living in modern slavery, beyond simply “keeping an eye out” in public?

Yes, we believe there is.


Investment & modern slavery

Tragically, only 0.2% of modern slaves are actually helped each year – despite the efforts of numerous NGOs, governments and international organisations.

To truly make a difference, therefore, people in the private sector need to mobilise and act. That’s where investors can step in.

It isn’t always easy to know exactly where to start in this area as an investor. Where exactly can I put my money in order to positively impact people’s lives, whilst making a return? How can I be sure that my money is actually being put towards a good cause?

We cannot possibly give a complete answer to these questions within one article, but we can suggest some good places to start.

First of all, it’s important to recognise that particular goods are more likely than others to have been produced under modern slavery conditions and within certain territories.

For instance, fish, sugarcane and cocoa from Indonesia are more likely to be produced by modern slaves compared to cars in Japan (although the latter is not risk-free).

By educating yourself about the kinds of supply chains most at risk to modern slavery, it becomes easier to select funds and investments which minimise, or avoid, these kinds of practices and conditions.

It’s also helpful to know which industries have a higher exposure risk to modern slavery. A recent study by the Australian Council of Superannuation Investors (ACSI) found that there are at least six industries which should be in your radar, as an ethical investor:

● Textiles & apparel
● Financial services
● Mining construction & property
● Food & beverages
● Agriculture
● Healthcare

The financial sector is an interesting one, as this doesn’t usually spring to mind when people talk about modern slavery. Certainly, the direct business operations of financial services are not highly exposed to modern slavery, due to the highly-skilled workforce which is needed (investment managers, accountants etc.).

However, these financial firms’ supply chains might be affected by modern slavery, such as their IT procurement and facilities management. Financial firms can also have a big impact on modern slavery through their choice of investment funds offered to clients.

By selecting funds containing companies with adequate anti-slavery policies and procedures, for instance, financial firms can offer clients more ethical investments to commit their money to.


What should we do?

It might surprise you to hear that the financial services industry, globally, is still rather underdeveloped with regards to its approach to modern slavery. Traditionally it has seen itself as “low risk” due to its skilled workforce. Yet many businesses are starting to wake up to the impact that their funds and supply-chains can have on modern slavery.

Ignoring the situation is no longer sustainable. Power and change tend to move where the money goes. So if investors can start to become more aware of the difference their money can make, and be offered viable and ethical assets and funds to invest in by the financial sector, then everyone could make much more of a positive difference.

Of course, it isn’t always straightforward. After all, what would happen to those people working in those awful factories if every investor suddenly pulled their money out of these companies, and put it into more ethical funds? Wouldn’t all those people lose their jobs and means of income, as meagre and pitiful as these might be?

Those are difficult questions and perhaps the answer lies in making people more aware of the problem of modern slavery and putting increasing pressure on the private sector to move closer towards where it should be on this subject.

As companies start to see where the winds of change are blowing, they can put measures in place to start to change course.