Save & Invest Financial Planning

Markets startled by good news

Global stock market turbulence has dominated the news headlines and is a reminder that investment returns are not normally achieved in a steady upward trend. 2017 was an uncharacteristically smooth year of positive returns.

What the news stories are not highlighting is that this fall is not as great in percentage terms as that which heralded the start of 2016. Volatility is what separates market investment from interest rate returns and market reaction to news can be counterintuitive.

The good news that wages were at last on the rise in the USA and that they had 200,000 new jobs, came as a bit of a surprise to markets and they are recalibrating to anticipate a world where interest rates can rise and inflation targets are met.

So despite the dramatic headlines, economies are growing globally, company earnings are positive and although interest rates are predicted to rise they are still far off what could be termed a reasonable return for investors. Even after the falls of the last few days most portfolios are well up on this time last year.

Save & Invest portfolios are well diversified across different managers and strategies with some managers overweight in cash which can be put to use in this current dip.

How sustainably focussed is your portfolio or pension plan?

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