Your Q3 2018 outlook
Find out what a slowdown in the world economy could have meant for your money in Q3 2018
CAPTION: We're seeing a slowdown in the world economy, rising inflation and interest rates, as well as a lot of uncertainty around Brexit. But what does this mean for the financial markets, and your investments, over the next few months?
TREVOR GREETHAM: I'm Trevor Greetham, Head of Multi Assets for Royal London Asset Management. I'm going to be talking about what's happening in the financial markets and the world economy, how it impacts members portfolios and what we see as the outlook.
The world economy has been slowing down. America is strong but China has been cooling off a little bit and we've seen weaker growth in the UK and in Europe. That means there has been some downward pressure on share prices. At the same time though the oil price is going up and inflation is rising so interest rates are going up and that's a bad configuration for stock markets and it's causing a bit of volatility and we are expecting to see that volatility continue. There may be opportunities to be buying shares again as we don't think that this business cycle has finished and growth is still strong enough and interest rates are still low enough that we think there more money to be made in shares, but a bit more cautious at moment looking for opportunities to buy at lower prices.
We are still seeing a lot of uncertainty around Brexit. It's still very hard to understand what sort of deal will be agreed, whether any deal will be agreed and even whether Brexit happens in full or not. These things are still very much up in the air. As a result from a member point of view it's still very important to keep a good spread of investments. Some investments will do well if we have a closer relationship with the EU, commercial property here for example. Other investments would actually do quite well if the Pound was to weaken on a more disorderly exit. Overseas equities would do well at those times.
Generally if you've got a more cautious approach to investing the higher proportion of your money in sterling assets you have, the less you have to worry about fluctuations in the exchange rate which is where we see most volatility around Brexit.
My team at Royal London Asset Management will continue to monitor what is happening in the world economy and what is happening here at home to make decisions on your behalf in terms of how we are positioning your investments and we'll come back and report to you in three months’ time on what's happening and how we see the outlook developing.
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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