September 2023
- The factors affecting the world economy and investment performance;
- Persistent inflation;
- Albeit lower in the US.
- Higher interest rates on deposits gives depositors more money which they are spending which is feeding persistent inflation as are wage demands;
- Notwithstanding the above inflation and interest rates may be at their peak.
- Stagflation possible in the UK.
- UK property prices continue to slide in the UK.
- China has structural problems but is unlikely to suffer a recession this is good news for the world economy.
- Our portfolios are doing well because:
- We have been investing client capital in high quality companies with deep pockets.
- We have continued to invest in tech.
- We have avoided investments which have governance problems and over exposed to very small companies which are suffering as the market becomes more choosy.
- We have used the higher interest environment to access corporate bonds government gilts with short maturity dates and cash.
- We have been investing client capital in high quality companies with deep pockets.
- Our portfolios use fixed interest and fixed interest investments suffer when interest rates are high and there is more supply this affects their value negatively. It should be remembered however with fixed interest you get your money back at maturity not the case with other investments so it’s a matter of holding these investments until interest rates start to come down or the investment matures.
- Persistent inflation;
Please note that:
- This information in isolation is not financial advice.
- Past Performance of investments is not to be relied on and the value and the income from investments can go up as well as down.
- It is advisable to regularly review your investments.
