INVESTMENTS & PENSIONS
NOT EVERYTHING IS GOING UP FROM HERE THOUGH
In the short term , the outlook for bonds and equities remains positive , given the improved economic outlook , but what the changing environment does mean , is that the interest rate for cash deposits is likely to start falling .
In the medium term , it is the same outlook for cash and we need to wait and see how inflation and economic growth do before getting too carried away with risker assets , such as bonds and equities , although they do not look expensive at all . Indeed , there are parts of those asset classes which appear to be very good value and parts that do not ; getting your investment choice correct is going to be key to investment returns next year .
In the longer term , for 2025 and beyond , the central banks are expecting inflation to head back to their targets of 2 %, which will mean interest rates are very likely to follow suit and keep falling , which would be a further boost to financial markets and a further reduction in returns from deposit accounts .
THE LAST WORD
As we entered 2023 , the outlook for the global economy was poor ; inflation was rife , interest rates were on an upward trajectory and recession was a likelihood . Unsurprisingly , financial markets reflected those factors in the returns they provided .
As we start 2024 , the outlook for the global economy is much improved ; inflation has fallen sharply and appears to be heading lower , interest rates look set to start falling and recession may be avoided or be mild . Unsurprisingly , financial markets have moved upwards from lower levels .
What next ? Time will tell , but I , for one , am much more optimistic that it will be prosperous new year this time .
RISKS
The value of stock market investments will fluctuate , which will cause fund prices to fall as well as rise and investors may not get back the original amount invested .
Past performance is not a reliable indicator of future returns .
FOR INFORMATION PURPOSES ONLY . The views and opinions expressed here are those of the author at the time of writing and can change ; they may not represent the views of Premier Miton and should not be taken as statements of fact , nor should they be relied upon for making investment decisions .
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The views and opinions expressed here are those of the author at the time of writing and can change ; they may not represent the views of Premier Miton and should not be taken as statements of fact , nor should they be relied upon for making investment decisions
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