Your Q4 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.

CAPTION: We’ve seen a bit of a slowdown in the world economy this year, combined with a rise in inflation and interest rates, and a lot of political uncertainty around the globe. But what does all of this mean for your investments over the next few months?

TREVOR GREETHAM: My name is Trevor Greetham, I’m Head of Multi Asset for Royal London Asset Management, and I’ll be speaking to you about what’s going on in the world economy and the outlook for financial markets.

The world economy has been slowing down a bit this year; inflation’s been rising a bit and interest rates have gone up, especially in America. On top of that we’ve had a lot of political uncertainty with President Trump threatening a trade war with China, and of course with a lot of Brexit uncertainty. We scale back exposure to company shares early in the summer because we saw some of these storm clouds gathering, and we saw quite a big drop in share prices over October. Since then we’ve been buying back shares at lower prices, because we think that the world economy will actually remain quite strong. The American economy is strong because Trump has been cutting taxes and increasing spending, and the President of China announced a big stimulus package, and that should result in some strength in the Chinese economy next year as well.

All of that suggests to us growth will pick up and we think stock markets will recover going into 2019.

Brexit uncertainty is still with us. There’s lots of different possible scenarios: we could see the UK leave the EU with no deal; the pound could go down quite a lot; we could see a deal; or we could even see a second referendum and the UK could stay in the EU and the pound would go up a lot. We’re dealing with that uncertainty by ensuring your portfolios remain diversified and spread out across a range of different asset classes, both at home and abroad, and should see pretty stable outcomes in all the different scenarios.

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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