Most of us in semi, or permanent retirement are reliant, to a lesser or greater extent, on our remaining nest egg to provide us with an income that will keep the proverbial wolf from the door.
Looking back, in recent years, the results of leaving our hard earned cash to the vagaries of the World’s Stock Market would have sent a shudder through anyone’s spine.
Banks are paying next to nothing and, as I’ve already said the Markets scare the living daylights out of most investors, so where does that leave those of us that simply require a reasonable return on our Investments, without risking the shirt off our back?
The Funds that have shone brightly out of the debris of the Financial crisis are those which are now commonly referred to as “Non-Correlated”, which simply means they are not connected to the Stock Markets. In real terms, this generally means Investments that are in niche Sectors, where the demand curve is very strong, at least in the medium term. There are a number of examples of Fund Managers, with International Bank Custodians (The ones who hold the money) operating in such arenas and they have shown themselves to be extremely resilient to the economic turmoil.
Take the example that probably applies to large numbers of Expatriates around the World. They have perhaps sold a house in their home country and purchased one abroad and, in addition, have other assets that amount to several hundred thousand Pounds/Dollars.
Let’s take a test case:
Mr. X has a house and 300,000 GBP in cash from savings, forgetting pensions at the moment. Applying those Funds to a Bank deposit, he is likely, in the current climate, to receive around 3% on a fixed term of 12 months, which results in an income of 9,000 GBP form his lump sum.
As an alternative, the non-correlated Funds, available through major International Institutions, have conservatively achieved around 7%, net of all management costs.
That same man has now increased his interest income from 9,000 per annum to 21,000 GBP, effectively more than doubling income. For those of us looking to preserve our Capital, whilst still maintaining a decent lifestyle, this is significant.
Our feeling is that these particular Funds have provided a real alternative for those trying to make their assets work for them, without quaking every time the Financial News comes on.
It’s important to note that these non-correlated holdings operate on a low risk profile, where demand exceeds supply, resulting in very stable and consistent results.
In summary, individuals can look further afield than bank deposits to improve returns, without taking an uninformed leap into the unknown.
Independent financial advice should be sought prior to making any Investment decisions.