As economies around the world start to cautiously emerge from their various states of lockdown, people are also stepping back into the light albeit gingerly and carefully. Some shops and services are open for business again, others have a while to wait still. Some activities that involve mass gatherings such as sports events and concerts face a quite uncertain future for some time to come. 

The last few months have been a time of great uncertainty for all of us. Apart from the threat to our health, most people’s work lives have undergone significant changes. For some, this has been a very difficult period with businesses closed and jobs gone for a while, or in some cases for good. Others have experienced reduced income as a result of the Covid-19 restrictions. Some lucky people have not really been hit in the pocket; they have just had to adjust to a different way of working.

We’ve all had quite a bit of time to think, both about the present and also what the future might hold as the pandemic runs its course.

Our own world of work has changed hugely in these times. Apart from getting used to working remotely, our core role of meeting the needs of our clients has changed a lot too. We’ve been unable to carry out our usual face-to-face meetings and have adapted as quickly as we could to using the full range of other means of communicating with you, our clients – by telephone, email, online meetings, messages etc.  The silver lining on this cloud has been our ability to have some really insightful conversations with many of you.

A theme has emerged from these conversations – a re-evaluation of the importance of money in the big scheme of things today.

Now we are not for one moment suggesting that money is unimportant or that your personal finances don’t need to be carefully planned.  Money is always important, it’s just not the “be all and end all”. What the lockdown has taught us is the importance of everything else. When it comes to your money, you need to have a plan and then let it go and do its work, refining it as your circumstances and goals change.

However what we’ve observed in these different times is that many of our clients are no longer sweating the small stuff. We’ve really seen this in the different conversations we’ve had with you in recent weeks. Previously, short-term volatility in investment markets might have resulted in lots of worried conversations, sometimes panicked decisions that more often than not damage your long-term wealth. We have seen so little of this lately, even though markets have been volatile. Most of our clients have rightly viewed the recent market turbulence as a temporary blip in a long-term plan.

Instead the conversations have been about the more important challenges in life today, with these then naturally veering towards the financial impacts caused by these changes.

In every single conversation with you, the starting point has always been an enquiry about our health and that of our families. This has been so heartening and has shown us the importance of trusted relationships and community spirit. Conversations have typically then moved quite seamlessly on to how we’re all dealing with the restrictions, and the impact they are having on family lives.

Yes, Covid-19 has caused challenges. Health concerns, work, childcare, schooling and social restrictions appear to be topping the list. But we’ve seen people wherever possible viewing recent times with a “glass half full” attitude. Many clients have spoken about the importance of health and how thankful they are that their families have stayed well. You have spoken about the challenge, but also the benefits of working at home - no-one has mentioned that they miss commuting and working long hours away from your families. Many of us have rediscovered the benefits of a bit more time on our hands and the flexibility gained from working at home. The importance of getting out for a regular walk with the kids has featured in many conversations, also having a laugh and finding new ways to socialise as a family. Simple pleasures that cost very little.

There has been a sense that we’ve all simply been more present with our families.  This is what will live long in the memory as the situation eventually fades. Money can never replace this.

Not having enough money certainly causes worry. However for many of you, your mindset has changed significantly, your view of how much is enough is now different. That shiny new car or expensive holiday is a bit less important to many, instead “enough” is now more focused on experiences, health and togetherness. We’ve seen a greater focus on planning for the long-term, ensuring you’ve enough to really support your families and live your life, as opposed to material possessions.

If you have been impacted financially by the restrictions, structured financial planning will help you deal with the situation, as you can consider different potential scenarios in the future. Having a robust roadmap will give you increased confidence that you will emerge from your short-term challenges.

Have a financial plan and manage your money wisely. The money is not important in itself, instead view it as a means to free your mind and to let you enjoy the things you love doing.

A recent phone conversation with a client triggered this article, as we were discussing the volatility in markets over the last few months. This was a relatively easy conversation, as this particular client has a very measured view to managing her pension fund and her investments. She doesn’t make rash decisions, she maintains a long-term perspective and doesn’t fret over every movement in the markets.

Our conversation then moved to on to the impact on all our lives of the Covid-19 restrictions – this is a topic coming up in every single conversation we’re having these days! As we chatted through the impact of the Covid-19 pandemic, we came to the conclusion that there are a lot of similarities between the worries caused by money and those caused by the pandemic. Let me explain…

It’s very easy to lose perspective

When the markets take a big hit as they did from the middle of February to mid-March, it’s very easy to lose perspective. After all, the S&P500 fell by over 30% in just over a month up to 23^rd March. It was very easy to think then that your long-term financial plans were blown to bits. Of course, at that point you didn’t know that there was going to be an immediate and rapid recovery of much of those losses. Your plan is decided by your long-term strategy, not what happens over a period of 4 or 5 weeks.

Similarly, when Covid-19 cases started to spread around the world and found their way to Ireland, it was easy to think the end was nigh. While this virus probably still has a long way to run, it’s important to remember that approximately half of one percent of the population of Ireland have been diagnosed with Covid-19 up to mid-May, and that the mortality rate is a fraction again of that number. Every death is a tragedy for the families involved, but the overall impact has still been relatively small. Now just like the markets, we’re not predicting the future based on past performance, we’ll leave that to our medical experts.

Good behaviours will win the day

We’re always at pains to point this one out in relation to your money. Short-term tactical decisions such as trying to time the markets rarely pay off. You might get lucky from time to time, but more often than not market timing decisions turn into expensive mistakes. Other good behaviour such as having a plan, maintaining a budget and continued saving will help you towards long-term success.

The same applies to the virus. It’s been drilled into us all at this stage about the importance of washing our hands, good cough etiquette and not touching our faces, as well as the importance of social distancing. We’ll beat this virus through everyone playing their part and adopting these good behaviours.

Be careful who you listen to

This one is so important! If you only went to Twitter for your news, you risk being turned inside out every day, not knowing what to believe. The virus is the end of the world, or nothing to worry about. Everyone should be allowed back to work now, or the lockdown is being lifted too quickly. Who do you believe?

This is a regular bugbear of ours. The weekend papers and online media can be an enormous and unnecessary source of angst for investors. We always caution our clients against making investment decisions based on what you read. We think it is really important that over a period of time, you identify a small cohort of rational opinions that you really trust for their balanced and non-emotional views. Listen to them and shut out the sensationalist, headline grabbing noise in the background.

By the way, we hope we’re one of your trusted voices…

Stick to the plan

We always seem to end up here! That’s because this is so important in relation to your money. Have a long-term plan that will guide you towards your lifestyle objectives, and then stick to the plan.

The same applies to you and your family’s approach to staying healthy. Agreeing as a unit to stick together, maintain your good health habits and minimise your risks will help every one of you stay healthy. And then maybe you can start planning how you’re going to celebrate success when you come out of this crisis together, all fit and well. Because that’s the goal.

Stay healthy.