The Importance of Financial Planning

Monthly Investment Note: December 2023

merry-christmasWe would like to wish all our client’s a very happy Christmas & Happy new Year and I would like to thank you once again for
continuing to place your trust in our services. MERRY CHRISTMAS & Enjoy the final note of the year!!

With Dasher, Prancer, Comet, Rudolf, and the rest, including of course the big man himself, all preparing for the big present drop, we start to look at winding down for the Christmas holidays, reflect on the years happenings and cast an eye on the possibilities for 2024.

In November, EU Inflation as measured by the Harmonised Indices of Consumer Prices (HICP) continued its downward trajectory to an average of 2.4% across the bloc with a range of -0.8% in Belgium to 6.9% in Slovakia. Ireland followed suit with lower inflation (3.6% to 2.5%) in the same period.

It’s fair to say at the moment, that the inflation story is starting to subside somewhat, with the Irish economy currently undergoing macroeconomic adjustments, such as reductions in GDP (-1.9%), GNP (-1.1%) and unemployment slightly rising to 4.8% (v’s 6% in the EU), all being attributed to the current ECB interest rate policy. Doing nothing with the interest rates at this stage makes sense as rates unchanged at 4.5%, are effective in impeding inflationary growth and indeed, successfully rolling inflation back closer to the desired 2% rate; the goal of the ECB monetary policy. In her speech, Christine Lagarde, stated categorically that no discussion regarding the roll-back of the ECB rate had taken place, as a specific signal to the markets not to expect rate cuts in early 2024….really!.. though you can imagine that some of the class must have had the odd quiet chat in the corners.

Across the pond in the US, we saw a very small reduction in the rate of inflation from 3.2% to 3.1% which was less than expected and which we read as flat. Like Europe, the Fed funds rate remained unchanged at 5.25% to 5.5% for the month of December. However, the commentary which emerged from FED President Jerome Power did nothing to quell the appetite of the equities markets which interpreted his comments as being “done with rate hikes”. That being the case, a re-pricing of equities has occurred and has led to a rally in November / December leading to a return year to date, of 21%.

The movement in inflation from 3% to 2% is exponentially more difficult economically, due to the more stubborn core inflation as the competing forces of high employment and wage inflation continue to drive prices to higher levels on the demand side and cost of goods on the supply side, in truth, it’s difficult to strike the right balance but the so-called economic soft landing does look like it might actually be possible in the US.

Looking to 2024, though both the ECB and Fed expressed their desire to hold interest rates higher for longer, as inflation approaches the 2% mark, it is entirely plausible that we could indeed see rate cuts in 2024. And the pressure to do so builds, given the level of debt across governments. Remember last month’s note, I mentioned the level of interest payments on the US national Debt was similar to the whole National Defence budget (ca. €1Tn)…..seriously!!…

Turning to US Treasury yields, we continue to observe changes in the yield curve dynamics once again and are putting these down to trading. The 2 year and 20 year bonds are now yielding 4.37% and 4.21% respectively (both down from October) while the 5 year and 10 year bonds are yielding 3.9% and 3.92% respectively (also down since October). So, the transformative change in the risk-free rate has now moved to stage two. Short dated bonds continue to pay a higher yield than the average dividend yields for stocks, and that being the case, the yield drops have also resulted in positive capital gains for bonds in portfolios for the short period….Not bad for the so-called risk-free asset.

Next to oil prices, not quite hitting the predicted prices of $100 Plus per barrel this year, (there is always one!!) but having hit the lofty early $90’s per barrel earlier in the year, prices have for now settled back to $77pb (at time of writing) a swing in correction of ca. 10% over the past month. I mentioned last month that oil supply chains having been re-engineered since COVID, but remember the ship that got stuck in the Suez Canal and the implications of the delay to world trade, in getting it dislodged? Well, it looks like the shipping merchants are now being held hostage on this occasion, by the Iranian backed Somali Houthi Pirates in the Sea of Arden, so much so, that Maersk, MSC and Hapag-Lloyd who account for ca. 50% of global trade transportation, have decided to halt using the Red Sea for the time being until a suitable coalition naval protection force is put into place. I mention this because, BP, one of the worlds biggest oil producers has halted Oil transportation through the straits on the same grounds. So, taking into account COP28, the brutal razing of Gaza which is infuriating the Arab nations, , OPEC plus politics, and the war in Ukraine, there remains a substantial credible threat to global oil supply, driving prices and supply side inflation. Indeed, increased inflation pressures could also be seen where the biggest shipping companies decide to no longer use the Red

Sea trade routes…..there is much to be wary of!


Setting macroeconomics aside, what does all this mean for investors?

Well, year to date, returns from global equities markets are ca. 19.3% which is up from October, driven in large part by the aforementioned US Market expectation that interest rate cuts are on the cards in early 2024. European Equities have recovered their recent shock in September to deliver ca. 15.5% since January, while US equities delivered ca. 21.4% and Japanese equities 15.3%, all in Euro terms.

Looking forward, we are seeing forward price / earnings ratios (one of our measures of value) moving once again away from long term averages with global equities trading at 16.5 times (increased from October), European equities at 12.0 times, Japanese equities trading at 14.4 and US equities trading at 18.7 times their forecast earnings. One notable feature of the US market at the moment is the returns showing in the equal weighted factor funds. This suggests that marketeers are on the hunt for value stocks looking beyond the magnificent seven (AMZN, GOOGL, AAPL, MSFT, NVDA, META, and TSLA).

The long-term forecast for growth in global stocks has been elevated slightly up to 10.6% with an average yield of 2.3%. This puts the equity risk premium which is the Forecast growth – the risk-free rate, at ca. 6.3%, nonetheless, current conditions still continue to also drive fund flows into the money markets which are currently yielding ca. 3.9% and which are now a component of many portfolio’s.

As always, we take the long view on Investments and are happy with globally diversified portfolios. In today’s (relatively) high or normal interest rate environment, we continue to see fair value in across global equities (fPE’s at 16.5). We have seen a small resurgence in equities driven by the perceived ECB and US monetary halt in future interest rate rises, which may (or may not) come to fruition and the acceptance that rates will likely not fall to any great extent until late in 2024 at the earliest. Our view, on global bonds has also remained as per last month. As mentioned, the US 10 year treasury  is now yielding a reduced yield of 3.92%, which is still attractive when compared to the average dividend yield of 2.3% for risk assets but not as attractive as some money market funds which are also paying the 3.9% yield and higher liquidity. Therefore, with bond yields at current levels, and interest rates probably plateaued, this asset class continues to look more attractive, than in recent years. Our cautious view on lower volatility portfolios continues to be implemented through the use of money market funds, currently yielding ca. 3.9% and hedge fund positions to exploit market inefficiencies; all in all, providing some degree of protection in the current volatile climate.

Sources: Central Banks: Federal Reserve, ECB, CBOI, Sharepad®. Euro Inflation is measured by the Harmonised Indices of Consumer Prices (HICP). Periodic Market updates & reading materials from Vanguard, Bloomberg, Ruffer, Davy Select & others depending on subject matter. All views and details contained are for information purposes only, are subject to change & are not advice. We recommend you seek independent clarification for your particular circumstances. Lifetime Financial Planning makes no representations as to the accuracy, completeness nor suitability of any of the information contained within and will not be held liable for any errors, omissions or any losses arising from its use.

The Importance of Financial Planning

A Brief Look at 2021


As we step into 2022, and look back at 2021, Global equities provided stellar returns finishing the year up ca. 32%. For the stock pickers, in particular within the technology sector, returns which one might expect to see annually, seemed to deliver almost monthly for a while, before, inevitably, the reality of forecasted interest rate adjustments and company overvaluations started to creep towards the end of the year.

Meme stocks, (don’t worry it’s a new term to me too!) driven in large part by retail (so called “Hood” investors) helped drive the whipsaw of volatility with some delivering eye watering temporary returns for companies with very little balance sheet substance and scything those short sellers in hedge funds who had acted rationally.




Geographically, the US was the best performing region and within business sectors, we saw some rotation as the Growth companies gave some ground to Value companies through the redistribution of capital within the markets. Across sectors, Energy (+53%), Technology (+40%), real estate (+39%) and Financials (+38%) all outperformed the markets with the laggards being the income producers such as consumer staples, telecoms and utilities, much in line with what might be expected given the emergence from a COVID restricted world.


Rising inflation started to take hold in 2021 with the CPI finishing the year at 5.5%. In the US, inflation hit 7% and beyond depending on states, and with the Federal Reserve finally signalling to the markets their intention to raise interest rates in 2022, we saw the start of an increase in market volatility which continues today.

Rising inflation also increased bond yields, thus reducing prices, the effect of which was seen greatest in long dated sovereign bonds.

The final big headline was the price inflation in commodities (with the exception of Gold which was flat) as the economic rebound saw sharp price increases across Oil (+55%), Gas (+53%), Aluminium (+37%) Copper (+27%), Steel (+49%) and …….Coffee (+76%)


So, with COVID and its variants still ever present, supply chains still not repaired, a high inflationary environment, imminent rising interest rates, war mongering in Eastern Europe, China tightening regulation, the US / Sino tensions rising and billionaires flying to space, it’s fair to say that we can expect some significant volatility across all markets in 2022.

We can’t control nor predict the markets. We do know from experience, that during times of great uncertainty, the worlds innovators, will step back, re-evaluate & adapt to the new macroeconomic reality in their continued pursuit of greater earnings growth and we, as owners of these companies benefit from these adjustments in the long-term.


If you are interested in starting your conversation about how investments fit into your Lifetime Financial Plan, please message me direct or contact us through

Michael Wall PhD CFP® is a Director at Lifetime Financial Planning. Lifetime Financial Planning Ltd Trading as Lifetime Financial Planning is regulated by the Central Bank of Ireland. All views and details contained within this article are for information purposes only, are subject to change & are not advice. We recommend you seek independent clarification for your particular circumstances. Lifetime Financial Planning makes no representations as to the accuracy, completeness nor suitability of any of the information contained within and will not be held liable for any errors, omissions or any losses arising from its use.


The Importance of Financial Planning

Business Owners, Diversify your Assets and “Protect thy Purse”

If you are a business owner or a practice partner, then, equity in your business will probably form a major part of your retirement strategy.
But ask yourself today; What is my exit plan?

How do I transfer wealth created by my business into my back pocket? And, how much will my business be worth to me when I decide to retire?
What happens to my retirement income if external factors beyond my control devalue my business? COVID-19 for example.
Exiting your business needs to be planned and carefully managed. Remember, the tax implications of not planning this well in advance can be severe.


Our advice is to use the business to build additional assets external to & independent from the business.
The charts show that in doing so, you diversify your personal assets and reduce the risk of relying 100% on your business to provide enough retirement income in later years.



Visit us at or for more information

The Importance of Financial Planning

Reminder to Submit Your Pension Contribution Before the Pay and File Deadline

We’re just writing to remind you to take full advantage of the generous tax relief available on your 2015 pension contribution before the pay and file deadline of 31st October, or 10th November if you file through Revenue Online Service (ROS).

Depending on your age and income, you may be eligible for up to 40% tax relief on your personal pension contribution for 2015.

Depending on your age and income, you may be eligible for up to 40% tax relief on your personal pension contribution for 2015

Every €100 you contribute to your pension could cost you as little as €60*

* Revenue rules, age and income related rules apply.

With tax free growth on your investment we believe it is a highly efficient and effective method of converting your current income into long term personal wealth.

To take full advantage of this generous tax relief, review your existing pension funds and start your Lifetime Financial Plan please call us at 046 9240961 or visit our website at

We look forward to hearing from you.


Aidan Wall

Aidan Wall


Aidan Wall is a Qualified Financial Advisor, a Fellow of the Life Insurance Association and a Senior Investment Advisor.
Aidan has been providing impartial financial advice to clients since 1983, and he has acquired vast experience in the areas of Financial Planning, Family Income Protection, Retirement Income and Investments.


Dr Michael Wall

Dr Michael Wall


Dr Michael Wall, PhD, is an Authorised Product Advisor (APA).
As an Authorised Product Advisor (APA) Michael is working under the mentorship of Senior Financial Advisor, Aidan Wall and has completed his QFA (Qualified Financial Advisor) examinations.


The Importance of Financial Planning

The Effect of Brexit on Pensions & Investments

A few Clients have asked about the effect of the Brexit decision by the UK on Investments and Pensions. The main effect of such news would be on the Equities (shares) part of portfolios. The two main markets we use are the Standard & Poors 500, (the 500 largest companies in the US), and the FTSE100, (the 100 largest companies in the UK).

One week after the shock decision, the effect on these Markets has been negligible.

The best way to assess the effect is to compare the value of a €50,000 Euros investment in the first three weeks of June, to the value of that investment at the close of business on 1st July, one week on from the shock announcement. The value at 1st July would be €50,129, a slight gain. Similarly a €50,000 Euro investment in the Standard & Poors 500, in the same period would have  ended up yesterday at €50,799, again a slight gain.

When such events occur, you always have to bear in mind

  • The Media always exagerate bad news. They give much less coverage to good news, such as recovery from market shocks.
  • Markets always tend to over-react to bad news initially.
  • You always have to take into account exchange rates, as well as changes in the stock markets.

If you have any queries please call our office on 046 9240961
Aidan Wall QFA FLIA
Lifetime Financial Planning