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The conversation around behaving more conscientiously grows louder daily, with socially responsible investing also part of this societal shift. Yet investing according to your values doesn’t have to be an all-or-nothing commitment – better understanding the rationale and benefits of this strategy can help you decide if it’s suitable for at least some of your overall investments.
The immediate economic outlook for the UK is poor. Since the 2008 Global Financial Crisis (GFC), the UK has been a low growth, low productivity and low wage economy. Now, in the wake of the Autumn Statement it appears to be becoming a high tax and high public spending economy, too.
Despite some advances in declining fees, Britain’s wealth management industry is still in need of a big overhaul. A bespoke portfolio is more likely to underperform when compared to a centrally managed portfolio, and to cost clients more. We examine this apparent disparity below and illustrate why this industry is ripe for change.
During periods of recession, it is not uncommon for investors to suffer losses in their investment portfolios. If a recession were to unfold next year, it would be broadly predicted and not catch many people by surprise. Rising interest rates, sky high energy prices and inverted yield curves in the bond market are all signs that make investors nervous that a recession is looming.
UK monetary policy leaves much to be desired – and we should examine the reasons why. The last week has seen both the US Federal Reserve and the Bank of England raise policy rates by 0.75%. There, however, the similarity ends.
Amid the pandemic, many individuals re-evaluated numerous aspects of their personal circumstances. This was no different for clients of wealth managers or those helping them to achieve their goals. While working for a traditional wealth manager for almost 20 years, many clients were increasingly questioning their long-term investment performance. I was also assessing whether I was continuing to provide them with the service and value for money they deserve.
Getting the right financial advice can help you stay on track to meet your wider goals in life. But under what circumstances should you seek advice – and how can you tell if you need it on an ongoing basis?
This column is not going to comment on the political problems engulfing the UK. You will be able to draw your own conclusions from that ever-changing environment. But political uncertainty is hanging over the UK outlook, although the risk-premium that was attached by the markets to UK assets in the wake of the mini-Budget has all but gone. Instead, here, the focus is on the economic and policy environment.
The International Monetary Fund (IMF) has just released their global economic outlook. It makes sober reading. But it may yet prove too optimistic about the year ahead. As the chart shows, the IMF sees the world economy slowing from its strong post-pandemic rate of 6% last year, to 3.2% this year and 2.7% next year. On this measure, anything around 3% or below is very weak.
It’s been a tumultuous year for investors to say the least. While the reasons are many and varied, it often feels like there is little respite – a shard of good news can be swiftly pared by an alarming day for stock or bond markets. Yet while negative narratives may seem relentless, you should still address the factors that will help you achieve your long-term objectives.
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