Your Q2 2019 outlook

There are lots of decisions we have to make when it comes to investing your money, from understanding how much risk you want to take and working out what investments to put your money into, to designing strategies so we can get you the best possible returns. The economic cycle and market conditions are really important when it comes to making these decisions, because they can affect how your investments perform, so we always play close attention to what’s going on.

To keep you updated, each quarter, we speak to Trevor Greetham, Royal London’s Head of Multi Asset Investments, to find out what’s been going on in the global economy and how this could have an impact on your money.

Hear how volatility in the financial markets could impact your money in Q2 2019

CAPTION: The world is facing a very unpredictable political environment, volatile financial markets and uncertainty over interest rates, but how will this impact your investments over the coming months?

TREVOR GREETHAM: Hi I’m Trevor Greetham, Head of Multi Asset at Royal London.

The financial markets have been very volatile over the past year or so. We saw a bit of a rollercoaster, with share prices dropping last spring, rising over the summer and dropping very sharply going into Christmas. This year, again, share prices have gone up quite strongly. The reason the financial markets can’t really make their minds up is it’s a mixed picture.

We’re quite late in the US economic cycle in particular. Interest rates have been going up for a while, and we see some good news and some bad news. We expect this two way pull to continue for some time. At the moment we’re mildly positive on company shares because we’re seeing signs of additional stimulus in China, and the fact that interest rates have at least stopped going up in America coming through. But we’re keeping our eye on 2020 because the housing market in America has started to slow down in response to about two years of interest rates rises. And if that carries on it could threaten growth next year.

Closer to home, of course Brexit remains an issue. It could end in many different ways. On the one hand we could leave the European Union without a deal, in which case I would expect the pound to drop quite a bit further than it has already. We could cancel Brexit altogether, in which case the pound would go up. And this has an impact on members’ portfolios, because you have some of your money invested overseas, and therefore the exchange rate matters.

The good news is that all of the portfolios are invested across a range of different asset classes likely to do well in different circumstances, and that diversification, the spreading of investments across lots of different asset classes, should result in a degree of stability.

So summing up, lots of risks out there on balance, we’re moderately positive at the moment. We think global growth will surprise a little bit positively this year, and next year we’re a bit more concerned so we’re keeping a very close eye on things. We’ll keep you updated on the financial markets and the way we’re positioning portfolios as the year progresses.

CAPTION: If you’re unsure about your pension or investments, an impartial financial adviser can provide guidance based on your requirements.

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