Our content this month are as follows:-

• Markets, Banks, Fraud
• How long will you live?
• Books we have read
• An Inspiring Story
• Quotes of the Month

Where do we start? Markets continue to be turbulent and have not been helped by the increasingly bad news from the banking sector, culminating in the news from France that their own version of Nick Leeson has left a hole in the balance sheet of Societie General. The sell-off of his positions only helped to make things worse in the market. Once again we are reminded of the question recently asked in the Financial Times; "Are clients aware that their bankers seem to spend their time in dark alleyways playing dice?"

As we have said many times, and as numerous studies have concluded, markets are moved by news; there is a view that the market has now priced the anticipated bad news and that some calm may have descended. You can never be sure, but it is always a bad idea to attempt to time markets. Missing the best 15 days in the FTSE All Share in the 20 years from 1986 to 2006 would have cost you a compound annual return of 3.37%. That adds up to a massive £940,395 in lost returns on an initial investment of £1 million!

We greatly appreciate the calm reaction of you, our clients, who understand that investment is for the long-term and occasionally markets will be uncomfortable. Despite short-term discomfort, there is reassurance in the facts; looking at one-year rolling periods starting in February 1955 and ending in December 2005 (600 separate periods), 63% of the time markets beat cash; in 75% of the 552 rolling five-year periods, markets beat cash and for the 492 10-year rolling periods, the market beat cash 100% of the time. Passengers in a boat in choppy waters are always advised that in order to avoid seasickness, they should concentrate on the horizon. Good advice at sea and for investors.

With advances in medical technology, improved lifestyles and healthier habits it appears we are living longer and longer. Professor Thomas Kirkwood, Professor of Medicine and Director of the Institute of Ageing and Health at the University of Newcastle, recently said that "life expectancy in the UK is currently increasing at a rate of five hours every day". (It will plateau, so living for ever is still unlikely!)

If you are 35 years of age now you have a 69% chance of reaching 85 and a 50% chance of reaching 90; even if you are 65 now your chances of reaching 85 are 63% and the odds are better than 4 in 10 that you will reach 90. The serious message behind these figures is that for those retiring at around 60 the chances are they will need sufficient capital and income to support them for another 30 years. If you want to increase your chances of living longer you might find the following information interesting:-

If you:

Get married you gain seven years for a man two for a woman

Moderate cardiovascular exercise you gain two to four years (eg running for 30 minutes, five days a week)

Eat five portions of fruit & vegetables a day you gain three years

Increase the amount of Omega-3 you eat (almonds, oily fish, etc) and you gain three years

Sleep for eight hours a night and you gain six years

Give up smoking and you gain six years

Meditate for 20 minutes a day and you gain one year

Keep a pet and you gain one year

Do brain exercises and you gain five years

Chat to friends and you gain three to four years

Have sex every day and you gain eight years!

At times like this when the papers are full of experts, giving panic stricken advice on where to jump next, we have recently returned to one of our favourite books on investment, "The Unbeatable Market" by Ron Ross. Noel and Les met Ron on their trip to Australia in 2005 and were very impressed by his quiet authority. He is a former Professor of Economics who turned to giving investment advice 23 years ago with the Premier Financial Group in California.

The book is extremely well written, makes its points strongly and often with great humour and covers the futility of active management, diversification and why it matters and the hidden costs of active management amongst many others. We have given copies to many clients over the years and are happy to send one to you - simply e-mail nikki@indexwm.co.uk for your copy or call the office and asked for Nikki.

Below is a brief note written by Sue Phillips, a long-standing client, who, as you will read, turned her life around in a remarkably short period. Sue’s contact details are below if you would like to enlist her help.

“Almost exactly to the day 2 years ago I woke up, looked in the mirror and thought “What is going on with my life?”

Looking back at me was someone who was 3 stones over weight, looked 54 rather than 44, had no work life balance and spent at least 60 hours at work or jetting around Europe…I was grey in colour and had lost that sparkle! In the words of Anastasia “I was sick and tired of being sick and tired!”…and I am sure (and now subsequently know) that everyone around me was also sick and tired of hearing me moan and nag! Just how did I get here? When did this happen? Why didn’t I see it coming?

In fact the most important question was “So what are you going to do about it?”

Well I decided to change and take action rather than simply just moaning. Sounds easy…well it wasn’t always and in fairness I didn’t always know where to start and I made mistakes along the way… and of course there were days when I just wanted to stay in bed under the duvet and talk to no-one!

So where am I now…well I’m 3 stone lighter, I’ve starred in a fitness DVD, I have a much better work life balance and gone are the 60 hour working weeks, the flying here and there and the endless hours sitting in meetings! I now work part time, with people I like and in whose values I believe and most importantly I’ve got my sparkle back and my enthusiasm for life.

I’m now very interested in helping others make lifestyle changes whether it be getting fitter, sorting out a cluttered office, organising an event or shaping a new strategy for work.

My background is very broad and I’ve worked in several blue chip companies in retailing, IT and financial services including Marks and Spencer, IBM, Sears and Creation Financial Services.

I’m a straight talker, good organiser and a great motivator. I may not have all the answers but will help you all I can …and if I can’t will know someone who can! So if you want to change things in your life just call me now on 07970 600384. I’m here to help you to make more time to do the things you like to do!”

Sue Phillips

"People begin to become successful the minute they decide to be."
Harvey MacKay: Newspaper columnist, author, and business motivational speaker

"It's choice - not chance - that determines your destiny."
Jean Nidetch: Founder and Consultant, Weight Watchers International, Inc.