You could be forgiven for viewing the seemingly constant apocalyptic news streamed from the media and think that tinned food and a bomb shelter might be a better option to an ISA or investment bond, but there are many indicators showing that the global economy is far healthier than it is given credit for.
It is true that trade is weakening globally, and central banks have far less room to manoeuvre in terms of monetary policy. However, this is balanced by the fact that there is still a robust services sector globally, combined with unemployment and consumer confidence remaining relatively high in the US and across Europe.
And while you may not describe President Trump as the most predictable man in the world, analysts are almost united in their view that 2020 will likely see a de-escalation of the trade war and therefore financial markets could rally.
Another reassuring example is the resilience of stock markets to continuing and troubling global headlines, such as the drone attack on Saudi Arabian oil facilities this year which halved the country’s oil output. Whilst there were immediate jitters, the dust settled quickly and had no sustained impact on equity markets – indeed, oil prices are currently far lower than they were a year ago. This is a response we are seeing repeatedly played out across the stock markets.
It’s worth pointing out that there hasn’t been a year in recent history devoid of a major global event. And yet, £1000 invested in the FTSE 100 back in 1985 would be worth about £19000 today. Knowing this, our strategy has always been to invest for the medium to long term, where the markets have always returned a greater yield than a building society or bank savings account.
Looking ahead, in the short term, we can now look onward to a UK general election. From a financial planning standpoint, we can only hope for a majority government to help break the political stalemate and restore forward motion to our economy, which will naturally filter through to investor sentiment – leading to an optimistic 2020 and beyond.
Here at Platinum, we always ensure that client’s portfolios are well diversified to mitigate any risk emerging from short-term economic shocks and we will continue to monitor the markets and make adjustments where necessary.
Please do not hesitate to get in touch with us should you have any queries or questions. Our team are always happy to have a chat. Whether it is a review driven by worries about financial markets, concerns regarding the impacts of an election on your finances, or simply an alteration in your situation or priorities, please contact us.