Our Views on the Markets and the Economy
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There has been much commentary recently about falling bond prices, especially around coverage of US Treasury bonds. But what does this mean for investors who hold bonds and even for those who are not invested in this asset class?
The world economy looks set to slow sharply this year, with technical recessions in the form of two successive negative quarters of growth likely in a host of countries, including the US, UK, and the major economies of western Europe such as Germany and France. Global growth could slow towards 3% (based on the International Monetary Fund’s measure), and while positive, growth rates on this measure of 3% are often low enough to be referred to as a global recession. This weakness will continue into 2023.
Our CEO Charlotte Ransom tells Ian King about how careful financial planning can help alleviate the cost-of-living crisis – and how meaningful human interaction paired with the latest technology gives investors better control, greater transparency and much more value for their money.
One of the significant focuses for financial markets in recent weeks has been developments in China. A zero-covid policy has triggered a sharp economic slowdown and also is leading to wider contagion, as supply-chains affecting global trade are impacted. This is the latest evidence of China’s growing importance to the world economy. So, let’s look at five factors in China to better understand the implications of its decisions and how they affect the investment landscape worldwide.
The Bank of England reaches the milestone of a quarter-century of independence in early May. After some initial benefits, it is hard to claim that the experience has been an unbridled success. There are strong reasons this milestone should trigger a fundamental rethink of the Bank’s remit and governance.
The importance of planning ahead effectively may seem obvious and often overstated. However, as our latest research findings show – with vital lessons from retirees about retirement – it’s all too easy to regret not taking certain actions, or to not be sufficiently prepared. But there are things you can do to tip the balance in your favour.
The big picture has not fundamentally changed recently. Latest developments reinforce existing market expectations of slowing global growth, elevated inflation and tighter monetary policies in most countries.
Surging inflation, the war in Ukraine and the continuing knock-on effects from Covid-19 have sharpened our focus on getting value for money. An emphasis on more cost-effective investing, therefore, takes on an even greater importance: over the medium term, lower overall costs ultimately help mitigate losses and enhance gains.
Russia’s invasion of Ukraine overshadowed all other issues during the quarter. Indicators of market volatility, which were already elevated, snapped higher as investors assessed the tragic humanitarian consequences as well as the wider economic implications for the European and global political order.
The placebo effect is well known in the field of medicine – it works on the principle of belief without any rational or scientific reason why it should affect an outcome. But belief, in itself, is very powerful and its effects are also evident in investing. We should therefore be careful our strategy is not led by belief alone.
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