As we take a look at the current financial world and investments, we took the opportunity to look back at previous US elections and the impact on markets.
Without any shadow of doubt financial markets and economies hate uncertainty. Whether trade disputes, elections, Brexit or COVID-19, they all create concern and indecision for investors.
As soon as there seems a clear direction financial markets and investors respond positively. This has been evidenced in the past week. The combination of a US election result (despite legal challenges) and the Pfizer’s vaccination announcement immediately boosted stock markets worldwide.
It is relatively easy to understand the logic of the sudden rise. It is partly due to a clearer idea of which areas of the US economy are likely to see investment, but mostly because the positive reminder that the COVID-19 lockdown is a relatively short-term risk to financial markets. Pfizer’s vaccine success story is hopefully the start of many vaccine stories that encourages people to look ahead.
This which should hopefully give economies and businesses a boost as the financial stimulus being pumped in by the various worldwide governments will hopefully filter down.
As always there are hurdles ahead, such as Brexit, but investors should be optimistic at how buoyant stock markets can be when we start looking ahead once more.
From a more technical aspect, our focus is on ensuring our clients’ portfolios are aligned correctly so as to still maintain their diversity but also benefit from the changing economic outlook. For example; Fixed interest style investments are likely to struggle from an oversupply of credit and low interest rates. Commercial property funds prospects are heavily dependent upon which sector they’re focused so could be overexposed. And equities seem to offer the greatest value looking at the medium to long term.
We are continuously monitoring how the changes impact on the pensions and investments we manage on behalf of our clients, implementing changes as appropriate.
At the same time, we are aware that the past year has enforced changes to current situations and aspirations. We are always happy to chat, to ensure any financial plans still align with personal goals.
In summary, we are feeling positive about the future and there are numerous reasons for thinking favourable investing conditions will continue.
Remember, our team are always available to help. Whether it is a review driven by concerns about financial markets or simply a change in your situation or priorities, please don’t hesitate to contact us.