Was 2015 good to you and will 2016 be better?

Writing this, after Janet Gellen’s announcement from the US Treasury, gives me a viewpoint from which to look back over 2015. Also, perhaps some thoughts as to what we may expect in 2016.

Looking back through the Smart Money pages published in the South Wales Argus and the various articles I wrote for Business Argus before and after the various budgets and statements makes interesting reading - well for me anyway.

On Tuesda,y March 10, I wished the bank base rate a happy sixth birthday. I also said 'Interest rates will remain the same until 2016 and will then only rise slightly'.

I confidently expect to celebrate the seventh anniversary of the lowest ever bank base rate ever, this coming March.

Last year was been a miserable year for cash savers.

This is the same for holders of National Savings, bank or building society deposits.

The interest on your money has been tiny, barely short of insulting. The only slight mitigating factor is that inflation has been virtually zero throughout the year, occasionally dipping into deflation.

For those with investments linked to the stock exchanges of the world, 2015 has also been a largely disappointing year.

The index, by which I mean the Financial Times Stock Exchange index of the 100 leading shares (FTSE100), has had a year of two halves.

Up until April 27 it was rising nicely to a level of more than 7,100.

There followed a series of world events: the continuing Greek euro problems; the Chinese allowing their currency to devalue; the strengthening dollar, which put pressure on emerging markets, and the steep fall in the value of oil and other commodities.

All of which reduced the FTSE100 to about 5,800 by the end of September. It is now hovering around 6,100.

Part of the problem is that the FTSE100 is no longer a fair reflection of the state of the UK economy.

More than 25 per cent of the index is represented by worldwide commodities. Roughly 65 per cent of the income earned by FTSE companies comes from abroad.

However, there is a bright side to holding savings linked to shares.

Companies declare dividends, payable to shareholders.

For FTSE companies, this has been averaging between three per cent and four per cent for some years now, so is a large contributor to total return. This is the sum of the increase in capital value added to dividend income.

Although dividends are not guaranteed, companies are loath to reduce them as this effects their credit rating and reputation.

So if you compare dividends of between three per cent and four per cent with what you are receiving on deposits, you can see why many people prefer shares.

There is also the point that one only loses money if the shares are sold in a downturn. The term is 'crystallising the loss'.

Many of Kymin’s clients are saving for the future on a monthly basis, whether this is for retirement or anything else. My view is that, this way you have 12 chances of getting it right each year. It certainly works over time.

So, what about the future? Or, more precisely, 2016.

Firstly, what can we expect of interest rates?

From what we can tell by what Mark Carney (the Bank of England governor) says, we may expect a rise sometime in 2016.

However, he has form in this area.

Some time ago he was predicting that when unemployment fell below seven per cent, he would 'consider' raising the rate.

Well, Mr Carney, it is now 5.2 per cent and falling.

He also said, looking further ahead, that rises would continue until two per cent to three per cent was reached.

When, your guess is as good as mine... sometime in 2017, maybe.

People with mortgages linked to base rate should be very happy.

Some of our clients are paying very low rates on mortgages taken out in 2006, even as low as 0.99 per cent for some lucky clients.

This has gone on much longer than anyone anticipated. As I said, back in March, sometime this year, this will change.

For cash savers, 2016 will only bring limited joy.

Maybe an increase of 0.5 per cent on rates overall, unless something very unlikely happens.

Recently, the government altered the terms of the pensioners bonds, issued last year. The best that can be hoped for is a gradual rise in interest payments.

It is generally thought that the USA increase in the Federal Rate was an indicator that there was more optimism in the growing strength of the whole American economy.

As this is the main driver of world trade, we can only hope they are right.

In wishing you all my best wishes for a Happy and Prosperous New Year, here are my resolutions for 2016:

Don’t fall prey to phone callers asking for details of you bank accounts. If they say they are from your bank, they are lying. Put the phone down.

Carry out a check of all your financial paperwork. Is your life insurance adequate and up-to-date? Likewise, do you have a will, can you locate it and does it reflect your present wishes? What about your pension arrangements. Are they sufficient for your needs?

Don’t rush any decisions. Get proper advice from a reputable firm.

Above all, ask yourself this question…'Am I better off than I was five years ago?' If not, perhaps you need to change the way you are arranging your financial affairs.

Remember, one definition of a fool is… someone who goes on doing the same thing, time after time, expecting a different result.

Is 2016 going to be your year of change?