Your Q4 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.

TREVOR GREETHAM: Hello, I’m Trevor Greetham, Head of Multi Asset for Royal London Asset Management, and I’m going to be speaking to you about the economic outlook and how this will affect your investments over the next few months.

The world economy has been slowing down recently, particularly because of the trade tensions between the US and China and some of the uncertainty around Brexit, but we think the economic cycle is going to continue to expand for some time to come.

If you look at the US consumer, people are still spending money over there, unemployment’s low, wages are rising and central banks have started to lower the cost of money. They’re cutting interest rates to try and boost the world economy and they can do that because inflation is under control, the cost of living isn’t rising rapidly and they’re able to try and help people along a little bit at these times.

As a result, we’re probably going to see things improve a bit going into 2020. We do see some near-term potential shocks. You could see difficulties around either the trade war or the Brexit negotiations, or some of the events going on in the Middle East. But we’re likely to buy shares if markets dip, rather than sell them. So, broadly speaking, we’re quite constructive about company shares. We think the world economy will keep expanding.

The UK economy is pretty weak at the moment, it’s on the edge of a recession. But, again, we think, one way or another, Brexit uncertainty will reduce over the next few months and, if the world economy’s picking up, that will help the UK economy as well and that should support commercial property prices.

So, generally thinking with your investments, you’ve seen quite a lot of volatility over the last year or two, but markets haven’t really gone down. We think we could see a bit more volatility. We’re constructive that there’s a good chance investments make progress next year.

I’ll update you again on the situation as it changes here in three months' time.

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