Achieving Balance This Summer
Now is very much a season of hope; a time to look forward and plan. While that’s not always easy amid a flurry of headlines concerning the cost-of-living and immense global political tensions, it’s important to look beyond short-term bouts of market volatility and ensure your financial objectives remain firmly aligned to your life goals – which may well have shifted or flexed over the last couple of years.
At times like these, the fear of losing money can be a powerful deterrent to investing. However, in reality, most of us have been investors throughout our lives – if you own your home, for instance, you’ve invested in the property market; if you own jewellery you’re effectively investing in precious metals. With inflation factors at play, some may consider holding too much cash as a risky move at present.
As well as being a season of hope and renewal, Summer is also viewed as the ideal time to declutter and reorganise. The last couple of years have taught us the importance of achieving balance in our lives – this extends to our finances too, making now an opportune time for investors to review and rebalance their portfolios to ensure investments remain aligned to their long-term financial goals.
Concerns surrounding inflation, rising interest rates and immense global political tensions have all combined to create a potentially disconcerting backdrop for investors during the early part of this year, as markets search for a stable footing. The good news is that many investors with long-term retirement goals tend to have time horizons that extend beyond inflationary cycles and any market volatility experienced is a normal investment phenomenon. History shows that investors who are patient and stick to their plans are more likely to achieve their financial objectives. Diversification is one strategy that withstands the test of time.
A ‘disrupted recovery’
The current mix of uncertainties has led the International Monetary Fund1 to downgrade its global growth forecast when its latest economic musings were released in January. While the international soothsayer does expect the global recovery to continue in 2022, it is now predicting a ‘disrupted recovery’ with growth forecast to moderate from 5.9% in 2021 to 4.4% this year – half a percentage point below the previous forecast made in October.
Many factors at play
Last year’s gains in growth due to rebounding activity now appear to be behind us. Although the pandemic will continue to impact growth rates, the outlook for macroeconomic policy is likely to become increasingly critical. Indeed, the path of the global economy this year looks set to be largely shaped by central bank policies, specifically, their ability to keep inflation expectations anchored while allowing a supportive environment for growth.
Your investment strategy
With the investment landscape undoubtedly changing, now seems an opportune time to spring clean your portfolio to ensure your investments continue to work as hard as possible for you. We can arrange a review to make sure your investment strategy is firmly aligned to your current personal circumstances and that your portfolio is well-balanced, diversified, tax-efficient and inflation-proofed where possible.
Need financial advice? Get in touch:https://audleywealth.com/
The value of investments and income from them may go down. You may not get back the original amount invested. Inheritance Tax Planning is not regulated by the Financial Conduct Authority.