Your Q1 2018 outlook

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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.

Watch how what was going on in the economy could have affected your money in Q1 2018

CAPTION: The mix of global stock market growth and low interest rates meant 2017 was a very good year for your investments. While we expect the outlook to remain strong in 2018, there are some things to watch out for over the next few months...

TREVOR GREETHAM: I'm Trevor Greetham, Head of Multi Asset at Royal London and I'm going to be talking about the economic market outlook, but also I'll start of by talking a little bit about why 2017 was such a strong year for members and investments.

Stock markets rose strongly over 2017 with the average stock market around the world rising by around 20% and technology shares going up by about 40%, so a very solid year and the reason why stock market was strong was that global growth is picking up, business confidence is rising in the US and in Europe but interest rates have stayed low. That combination of good growth and low interest rates is good for stocks.

We think the fundamental outlook for stock remains good for 2018, but we think there are various things to watch out for along the way that could cause some turbulence.

In 2018 we'd watch out for geo-political risk. The stand-off between the US and North Korea could intensify. We'd look out for a potential slowdown in the Chinese economy which is important for the world and what's happening with interest rates in America where we think they'll continue to rise, but broadly speaking we don't think any of these risks are actually enough to pull the world into another recession and share prices should continue to go up.

Member’s investments are tilted towards company shares; they have been for the last few years during this big sort of rise in share prices. We think that's the right place to be in 2018. We've also got some money in commercial property which had a good year last year. We think returns will slow a little bit but they won't be too bad in 2018. And we've shifted money away from the Government bond market, where interest rates are really very low. We think the returns will be relatively low as well. We'll be continuing to try to make sure that we've got the exposures to different investments in the place where we think you'll get the best growth and with the least risk. And you'll hear more from us about the world economy and how things are changing in your portfolio in future member updates.

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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