What a year we have had both politically, and in investment markets! Politics really does affect investment returns in the short term, and we have had enough uncertainty throughout the year to understand this to be true. A pessimistic tweet from Donald Trump can be enough to send stock markets into a downward trajectory, and a positive one can have the opposite effect.
However, 2019 has been a largely positive year for stock markets, with the FTSE100 rising more than 12% from early January. However, there has been significant volatility, and the same index fell more than 8% between the end of July to the middle of August.
The recent general election result gave UK markets a ‘Boris bounce’, but that is likely to be short lived, and uncertainties regarding a potential no deal Brexit have made markets jittery once more. It is only now that the negotiations really begin, and we would expect continued volatility in UK markets for the foreseeable future. The good news from our client’s perspective is that we have a relatively underweight UK position for most portfolios, and the potential in Global assets seems to offer better growth prospects.
The recent Trump/China ‘phase one’ agreement has been welcomed, and we would hope that the ongoing trade discussions will continue in a cordial fashion. It is easier to be re-elected when the domestic economy is healthy, and stock markets are moving upwards, and we expect the Mr Trump will use this to his advantage. If the largest economy in the world is doing well, it generally means that this positivity rubs off on other economies.
All in all, it has been a pretty good year for our clients. We wish you all a Merry Christmas and a Happy New year!
This entry was posted on December 18, 2019