Managing Market Volatility

Volatility is an important measure in financial markets. At times of stress or uncertainty, volatility rises. In contrast, low volatility is usually associated with stable or predictable conditions. In recent months, volatility has been relatively low.

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Britain’s wealth management industry is in need of big overhaul. The bespoke portfolio - which is more likely to underperform than a centrally managed portfolio and cost clients more - illustrates why this industry is ripe for change.

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UK inflation: An Update

Inflation is one of the key current domestic issues the UK economy faces. And in turn it drives monetary policy and has a major influence on the outlook for financial markets. Since the Referendum result last June, the UK economy has performed very much as we had expected - even though at the time our view differed from the consensus.

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The results of yesterday’s French Presidential election were broadly in line with the polls, as centrist Emmanuel Macron emerged victorious with 66% of the votes, emphatically defeating the far-right Marine Le Pen.

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Our research team has developed a simple way to demonstrate the impact of fees over the years on one's investments. We called it the 'Netwealth Wallet Card' and every savvy investor should carry one.

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The IMF’s Outlook for Global Growth

Away from the focus on politics in the UK or France, it is important to not lose sight of the latest developments in the global economy. The world economy is growing at a solid pace. This is best reflected in the fact that at its recent spring meetings in Washington, the International Monetary Fund (IMF) revised up its forecasts for global growth.

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European asset markets breathed a sigh of relief this morning reflecting yesterday’s announcement of the results of the first round of the Presidential election. Equity markets and in particular bank stocks rallied significantly, the euro strengthened and bond spreads narrowed markedly in early trading on Monday as it became evident that a run off between the far-left candidate Mélenchon and Madame Le Pen from the far right wasn’t going to eventualise and the favourite candidate to be elected president is the centrist Emmanuel Macron.

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What should investors and savers make of Theresa May’s decision to call a snap General Election? June 8th is just over seven weeks away, but as the saying goes, a week is a long time in politics.

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In February, we introduced the main candidates of the upcoming French presidential election and their policies, detailed the nuances of the French electoral system and identified outcomes that could result in significant financial market impact.

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At the beginning of the year, in our forecast that was included in the FT’s Year Ahead Survey, we were among the more optimistic about the UK. Then, we saw the economy growing just over 2% versus 2.2% last year. We expected the pace of growth to slow during the year, with growth next year weaker than this. This remains our view, and our forecasts are unchanged. In contrast, market sentiment has shifted very much towards our way of thinking.

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