Castlebay Monthly: June 2025

Callum Dunbar
Oct 30
5 min read

Welcome to this month’s edition of the Castlebay Monthly. Our feature article, "Your investment journey doesn't stop when you retire". At first glance, this may seem to only be appropriate for those of a certain age... not pointing fingers I promise! However, it is still just as relevant and important for those who are 10, 20 even 30 years away from when they intend on stopping work. The article aims to explain just how long your investment time horizon actually is, which goes well beyond what is often assumed.

For some further reading, the article ‘Some Things I’ll Never Spend Money On’ provides some food for thought. This led to quite the discussion in the office and revealed who was willing to collect their Friday night takeaway or pay for the delivery. Although paying for delivery may seem small, it is these sorts of differences that set us all apart. It shows where some of us see value and others see waste. This is even more apparent when applied to larger purchases.

We would love to hear from you about the things you would never spend your money on. But also, what are the things that you are happy to pay for despite the cost.

The Stock Markets

Your Investment Journey Doesn’t End When You Retire

You've finally done it. After decades of saving and investing, you've reached retirement. There's enormous relief and excitement about what awaits in the next chapter of life. But then a new worry creeps in. For the first time ever, you're living off your investments instead of adding to them each and every month.

For many investors, their first instinct is to “play it safe” with their hard-earned investments. This thinking may have made sense for previous generations. Most investors retired, bought an annuity (turned their pension pot into an income for life), and lived off the guaranteed payments. For many, the investing was done, the end of the road.

But times have really changed. Today's retirees (couples) face retirement periods of 20 to 30+ years, not the shorter timelines of the past. At the same time, investment markets have become more sophisticated, while lower interest rates have made guaranteed products less appealing.

What was once a safe approach is now a risk to your financial future. Our challenge to all investors, especially retirees, is to recognise that their investment timeline is much longer than they think.

The Reality Check: You're Investing for Decades, Not Years

It's easy for retirement to feel like the finish line. You've moved from the savings stage to the spending stage. Finally, no more worrying about the stock markets and investment returns.

However, that's no longer the reality. Today's 65-year-old couple has a one-in-three chance that at least one partner will live to age 95. Seen through this lens, it's clear that your spending stage could be as long as your savings stage.

The conventional strategy of gradually shifting to low-return, low-volatility portfolios in the years leading up to retirement is no longer sensible given this reality.

Rather than being at the investment finishing line, you are merely at the intermission. Your planning, mindset, and investment strategy need to reflect this. Your assets will ideally need to provide a rising income for up to three decades to keep pace with inflation.

This might feel overwhelming. But it's actually good news. You're not a retiree managing a shrinking pot of money. You're still a long-term investor, just in a different life phase.

Why Playing It 'Safe' Is Actually Risky

We understand that market volatility feels different when you can't replace temporary declines with further contributions. Your appetite for risk has changed, and those "stable" investments look awfully appealing.

But playing it safe is actually the riskiest thing you can do.

While you're focused on avoiding short-term fluctuations, inflation is quietly eroding your purchasing power. The things you buy today will cost dramatically more over the decades ahead. Meanwhile, those "safe" investments? They often can't keep up with rising prices.

We see this all the time. Portfolios that feel comfortable today often leave people struggling to pay their bills twenty years later.

The answer is not to throw caution to the wind. However, by understanding your required rate of return and building in a safety net, you can put yourself in a position to invest for the long term with confidence.

As an example, by keeping one to three years of expenses in cash or short-term investments, you’ll never be forced to sell assets at a bad time. You gain peace of mind, but your remaining funds can still pursue the growth you need.

We know from history that market volatility is temporary. Markets recover. But inflation's damage is permanent. Long-term investment returns are permanent, too, building wealth for those patient enough to stay invested.

The cash bucket lets you ignore the temporary whilst capturing the permanent.

Embracing Your True Investment Timeline

We can’t stress this enough: you're not a retiree managing declining assets. You're a long-term investor with a multi-decade investment horizon. Your investment strategy and asset allocation should reflect this reality.

We encourage you to review your current approach with this extended timeline in mind. Ask yourself: "Is my portfolio designed for a 30-year journey?" If not, it may be time to align your investment strategy with the reality of modern retirement.

We understand that maintaining growth-oriented portfolios in retirement requires both courage and careful planning. As your adviser, we recognise that implementing this strategy involves navigating complex trade-offs between your changing risk tolerance and your unchanging need for long-term returns.

Your financial independence over the coming decades depends on striking the right balance. We're here to help you navigate this transition with confidence, ensuring your assets work as effectively in retirement as they did during your accumulation years.

Life is for Living

While we always encourage smart saving and financial prudence, enjoying the life you're working hard to build is just as important. That means making space for experiences, community, and a little fun now and then!

Here’s a roundup of upcoming events that might pique your interest. Treat yourself because balance is key, and life is meant to be lived.

Last-minute weekend plans: The Reeling Music Festival, Glasgow

A date for the diary: The Royal Highland Show

Something for the tastebuds: Foodies Festival

Read

Some Things I'll Never Spend Money On [3 minutes]. Prioritisation is one of the best ways to both enjoy and save money.

How to Survive the Wrong Turns in Life and Markets [8 minutes]. Navigating life's challenges and market fluctuations requires resilience and adaptability.

The disease of more [9 minutes]. In a world overflowing with choices and information, are we truly happier, or have we contracted the "disease of more"?

A Picture is Worth a Thousand Words

The Castlebay Corner

With Summer just around the corner, it is that time of year when the social calendar starts to fill up, the BBQ is wheeled out and that 6 am rise to the airport is fast approaching. Whatever your plans over the next few months, we hope you have a lovely time and there is plenty of sun for us all to be getting out into.

We hope that you enjoyed this month’s newsletter. Please let us know what you enjoyed, or write back with any of your own news.

As always, we're here for you.

See you next month,