New Year's Resolutions

The past year has not been easy for many people. Situations have changed regarding income and what people own. A year ago things were starting to look up after two years of social misery and financial uncertainty. Many self-employed workers in the event business or related thereto were supported by financial aid provided by the Dutch government for a long time. However, some said that businesses not worth saving were in a zombie state.

Many employees and entrepreneurs kept an income during 2021 in a situation where it was difficult to spend. The outcome: many people with surplus cash. Home improvements were high on the to do list and after that many people dipped their toe into the investment market. The ride on the stock market between April 2020 and September 2021 was unprecedented.

Many of the new investors on the stock market had never experienced a downturn before. But after October 2021 things did not look as certain as they did before. A time in which many people stretched their financial capabilities for a bigger house. In February 2022 life took a different turn for many. We have all seen the reports, and are in awe of the Ukrainians’ resilience, and disgusted by Putin.However, we also suffer the consequences. Some consequences are not felt directly, but government spending to counter Putin’s war machine is phenomenal; nevertheless, at some point we will have to pay the price. However, that is of later concern.

What is felt already took some time, but inflation is finally here, and it is larger than the last peak 30 years ago. Governments have taken action to support their populations once more, because, as this does not affect everyone equally, the consequences are unequal.

So, what do you do if your savings have been affected? We tell all our clients to diversify risk (to not put all your eggs into one basket), and not to try to time the market by deciding to sell if the markets tank. Wealth planning in diversified portfolios is mostly about being in the market to benefit from the possibility of the market recovering. When you need your wealth in a few years you should not be investing at all. We understand that is difficult, to bide one’s time this way. But when you have time, please use it.

And when your income has taken a hit, or is expected to do so, it is all about priorities to avoid shortfalls. Admittedly, this is easier said than done. But we have seen it as a successful remedy to avoid debt, and as an accelerant to create a buffer first and wealth later.

So, what comes first for you? Maybe a conversation with a financial adviser will help determine your next step.

We wish you and your dear ones a healthy, happy, and prosperous 2023.