Advice: how good are you at taking it?

The best advice in many lifetime experiences can be the hardest to act on; the benefits maybe not evident for many years and not always what you want to hear at that time.

Independent Financial Advice is not an expensive luxury - don't focus on the cost rather on the benefits as down through the years how many times have you heard "Hindsight Is A Wonderful Thing" or "if we had only known then what we know now."?

PJ McIlroy & Son have advised on various commodities for almost 50 years and have seen many investment cycles and bubbles come and go.

Examples of UK Stockmarket Recoveries

On Black Monday, 19 October 1987, the FTSE 100 index fell sharply following heavy losses on Wall Street the previous Friday.

Though the trigger for that crash wasn’t fully clear, there were fears about increasing US interest rates and a falling dollar.

By the end of October the UK market was down 26.4% but when economic disaster did not occur, investors started to regain confidence, the market started to recover, and by May 1989, the FTSE 100 was back to its pre-Black Monday level.

The reason for the next fall in the market was more obvious. Reacting to the uncertainty caused by the Iraqi invasion of Kuwait in 1990, the UK stockmarket dropped 15% between August and September.

But by the time the Gulf War ended less than six months later in February 1991, the FTSE 100 had bounced back to where it was before the invasion.

It was a credit crisis that led to the next market fall in 1998. When the Russian government suspended
the repayment of its debts to foreign governments and devalued its currency, there were concerns
that this would lead to a global financial crisis, and stockmarkets around the world fell.

The FTSE 100 fell 18.5% between August and the beginning of October, but as it became clear that the other countries had not been affected by the Russian crisis, the UK stockmarket recovered.

By the end of that November, the FTSE was back to the level it had been in August.

It was perhaps not surprising that the terrorist attacks in America on 11 September 2001 should cause the US stockmarkets to plummet, especially since the US economy was already faltering at the time.

The UK market also reacted and by 21 September the FTSE 100 had fallen 12%. This time the market rebounded particularly rapidly after US interest rates were cut in order to stimulate the economy.

By 5 October 2001 the FTSE 100 was back to where it had been prior to 9/11.

The so-called bursting of the technology bubble predated 9/11 but its effects lasted longer. It had started around March/April 2000 after shares in technology and internet companies had reached unsustainably high levels and investors started to withdraw their money.

Once share prices started to go down they continued to decline for the next three years with a few interruptions, until the FTSE 100 had eventually fallen 45%. The trigger for the recovery from that bear market was the start of the Iraq war in March 2003.

Since then, share prices have risen steadily back to their old levels with a few small hiccups until July 2007, the start of the global ‘credit crunch'.

Managing your Finances

When it comes to managing your finances successfully, you must take a well balanced approach and the underlying asset selection must be tailored specifically to your tolerance of risk, length of time you can hold the investment, your existing investment exposure, affordability and be regularly reviewed to accommodate the inevitable changes in your financial goals.

Through our well trained and experienced staff, PJ McIlroy & Son try to build a long-term advisory relationship with our clients so that they get the product that suits their needs and an ongoing advisory service when they are having problems.

Independent Financial Advisers (IFAs) have no contractual ties to the product providers (such as life insurance companies) whose products they advise on.

IFAs act as the agents of their clients and their independence enables them to research products from across the whole market.

IFAs are the only advisers who must (under the regulator's rules) provide you with the option to pay for your advice entirely by fee, rather than taking any commission that the product provider will pay. As such, they give you more flexibility when it comes to deciding how you want to pay for the advice you receive.