MARKET UPDATE:

The start of 2019 has been surprisingly calm. European shares gained last week as better than expected German and US economic data emerged. Global equities have rebounded on the promise of US/ China trade deals. Bonds remain higher than persistent low inflation. Irish stock also rose to their best level in nearly a year.

We still believe that 2019 will be an unpredictable year and we will need to prepare ourselves for higher volatility. While the global outlook is positive growth remains slower than in previous years. There is little news on Brexit now that Article 50 has been extended to 31st October.  If no agreement is reached by then a general election or a second referendum may need to be called. A possible recession in Germany, ongoing tensions between the USA and a number of other countries, and overall disappointing global economic data are all factors in slower levels of growth. ECB has also announced that it will not be increasing interest rates until June 2021. This year clients will need to take increased levels of risk to obtain the same levels of growth as in previous years. Risk isn’t for everyone, therefore expectations of returns need to be realistic for the foreseeable.  Stay focused on the long term objectives. Stay invested through the ups and downs. Markets suffered losses of double digits in 21 of the last 38 years yet finished up positive 75% of the time.  Ensure you have a diversified portfolio and spread risk across a range of assets, strategies, styles, currencies and ranges.

MORTGAGE NEWS:

AIB Group (Haven) are the latest lender to have reduced its fixed rate to 2.85% for 3, 4 and 5 years. Equally impressive are their APRC rates at 3.2% 3.1% and 3.1% respectively, reflecting their low follow-on variable rates. The European Central Bank (ECB) said it will keep interest rates at their record low “at least through the end of 2019” at its monthly rate setting announcement yesterday. This is welcome news for mortgage holders and mortgage service providers since the market had long anticipated a rise in interest rates in the second half of this year from the all-time low current rates.
Sinn Fein is currently proposing a ‘No Consent, No Sale’ bill, which would prevent banks from selling customers’ home loans without borrower approval. The bill has been vigorously opposed by banks as well as the Central Bank and Department of Finance, who say it would provide no extra protection for customers but would have unintended consequences such as driving up interest rates for all other mortgage holders. It will remain to be seen if this bill will be approved and if so, what the outcome will be.

LEGISLATION CHANGES:

For individuals with an Approved Retirement Minimum Fund (AMRF) and/or vested PRSA’s, recent changes in Social Welfare pensions now means that you may reach the guaranteed income requirement of €12,700 per annum. Social welfare payments increased in March 2019. If you are in receipt of a Social Welfare pension of €243.39 per annum, you may be able to change your policy to an Approved Retirement Fund (ARF). You must notify your insurer to advise them of this. However, once you convert to an ARF you must make a minimum withdrawal each year. As a result, future retirees that reach State pension age and are in receipt of the maximum rate of State Pension will no longer be required to purchase an AMRF.

CONGRATULATIONS…TO US!

We were recently honoured to have been awarded with the coveted All-Ireland Business All-Star accreditation at Croke Park. This is an independently verified standard mark for indigenous businesses based on rigorous selection criteria on performance, trust and customer centricity. This is the result of hard work, sound advice and dedication to our clients. It also shows the trust our clients have in us…so thank you!