Here at Reeves Independent we are always striving to keep up-to-date with investment opinions to ensure our clients get the best possible returns for their portfolios! Below is what the experts are saying about the next few months investment outlook
- Both the domestic economy & overseas order books are continuing to show improvement
- UK Small Caps continue to ‘trounce’ the markets biggest shares
- All reports once again show that this year looks like being another strong one for commercial property in particular
- European Central Bank (ECB) kept interest rates at 0.25% as the ‘deflation’ issue continues. However the ECB President Mario Draghi has indicated for the first time the possibility of Quantitive Easing being introduced – certainly something to keep an eye on!
- Valuations are supportive & corporate competitiveness improving, but fiscal programmes & structural reforms remains constraints while the ECB has not managed to improve credit availability in many sectors
- Europe looks most exposed to any developing problems in emerging markets
- The continued geo-political uncertainty in Ukraine is also a worry as previously mentioned
- All reports show the fundamentals in terms of consumer spending, housing & business confidence are improving
- Fidelity quote “There is simply less to worry about in the US than elsewhere in the world and that makes it stock market a relative port in the storm”
Asia & Emerging Markets
- Performance is increasing divergent, while some countries are benefiting from strong domestic fundamentals; others are under pressure from politics, current account deficits & tighter monetary policies
- Although Japan has its problems “it looks fundamentally sound, reasonable value & well supported by government policy” (Fidelity). April sees the introduction of an increased consumption tax so experts are waiting to see the consequences of this on the Japanese economy. Therefore investment should be seen in a medium/long term view
- China is undergoing a significant growth slowdown, although it is still seen by many as an attractive investment for the long term
- India’s persistent problems with poor infrastructure & bureaucracy continues to cloud the outlook longer term
- The renewed recovery in the US has meant that investors increasingly see no reason to take on the higher risk of investing in developing countries
- It is expected the economic cycle is to continue to be more positive for the rest of 2014 as the recovery broadens out in more countries
- Equities still look better value than bonds & commodities
- Increased investor enthusiasm for technology & bio-technology stocks
- Tom Stevenson (Fidelity) “I am more convinced than ever of the need to manage a balanced portfolio at times like these, to spread ongoing investments over time to the extent that is possible in order to benefit from any short term dips in markets & to keep some powder dry in case there is a more significant downturn”
So what does this mean for our Investors & Portfolios?
- As previously stated: clients still in cash should consider investing due to increased confidence
- Cautious clients who don’t want full exposure to equities should think about investing in our chosen commercial property funds
- Heavier focus in the US
- Maintain UKinvestment: especially in UK Small Caps where all data
- Potential to be brave in areas that are struggling i.e. Emerging Markets. Opportunityto buy cheap stocks with a long term view on returns
- Continue to invest but with caution in an uncertainEurope(not includingUK) until geo-political issues are resolved & and upside in Emerging Markets returns
- Further opportunities to invest in specialist technology funds
- Possible diversification opportunity in China/Japan for long term growth (for the brave!)
If you would like to discuss your portfolio please contact us now on 0191 281 9862 or e-mail email@example.com to arrange an appointment!
Disclaimer: This email is not intended as advice and no investment decisions should be made solely on the back of this email. Past performance is no guide to the future. All investments carry the risk that you will not get back what you have put in.