2019 outlook – More troubled waters or will it be low tides?
After steady growth over the past few years in investment prices, 2018 brought about a more challenging year for investments, particularly towards the latter end of the year. Whilst Spring saw accelerated growth at the beginning of the year for the US, triggered by Trump instigated tax cuts, the Eurozone had more troublesome waters. The US bubble didn’t take long to burst however as growing concern over political unrest and issues over China soon took their toll on investor confidence.
June – Dec 2018 gave one of the largest falls in the FTSE 100 since the 2008 crash, wiping almost 14% and billions of pounds from the market. The Dow Jones Industrial average also fell a similar percentage in the same time frame, with global stock markets following suit.
Whilst the start New Year has seen more positive market movements, prompted by Trump and China’s willingness to start trade negotiations, there are still deep rooted issues that potentially pose massive global problems for the near future: –
- Are US bond yields signalling an ongoing recession?
- What will happen following the Brexit fallout?
- Strong US dollar causing problems for commodity prices and global debt
- Eurozone political turmoil and subdued growth outlook.
Notwithstanding the above past and potential future market issues, the key point to investors is not to time the markets, and make sure what level of risk you are comfortable with. As an investor you need to be asking yourself the following questions:
- How long have I got to invest and can I afford short term losses?
- What level of risk am I taking with my current investments?
- Am I comfortable with said level of risk?
Now is key time to be reviewing your investments and pensions, and making sure you know exactly what you are invested in and ensuring that it is the right level of risk for you.
Chartered Financial Planner