We have seen equity markets bounce back as they adjust their thinking towards yet more rate hikes, reminding themselves that, proportionally, we are moving closer to the end of the cycle – even if there have been lots of false dawns. Perhaps another one may be unfolding as equity markets pull back over the last couple of days in response to recent rhetoric over prospective interest rate hikes.
Conflicting data, and indeed sentiment, clouds the short-term outlook but, as we all know, if stocks become cheaper there is a stronger chance they will recover more firmly at some point.
The agenda this week is as follows:
- Cash is attractive
- Investment Psyche
- Why disinvesting and placing money in cash can be problematic
- Bullish view on equities
- Weaker manufacturing data… is this good news?
- Brighter outlook for emerging markets
- An escalator going up and a lift coming down!
Cash is attractive
Without doubt this is the case, but for each and every person the relevance of moving money into cash is dependent on each individual situation. If you have a significant amount of money in cash deposits and you don’t feel confident about investing, then a mix between variable and fixed interest accounts may work effectively for you. One has to bear in mind the need for liquidity, so be careful about tying too much money up in fixed-term deposits.
However, we have also seen a flurry of money coming into investment markets as they have largely proved resilient over the last nine months, moving off equity market lows in October of last year. Sentiment may be uncertain around the economy, but corporate earnings have proved to be more resilient than anticipated and we have also seen significant momentum, particularly with technology stocks. Granted, these are the very stocks which got battered in the first nine months of 2022.
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Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.