City Of London Wealth Management Awards
Before we dive into this month's commentary, we want to thank you for your support of Moola. In the 2019 City of London Wealth Management Awards which involved votes of over 30,000 members of the investing public, Moola is proud to have won the Goal-Based Investing Service award. Thanks, as always, for your support in making this possible.
Market Outlook Remains Mixed
2019 so far has bought positive trends for diversified portfolios. Global stock indices have generally risen meaningfully off of the lows in December. Bonds too have often benefitted as the anticipated path for interest rates in many regions has declined. Bond prices typically rise as interest rates fall.
However, the economic outlook appears mixed. The U.S. Federal Reserve sees a less certain picture for the global economy in 2019. They are essentially taking a wait and see approach as more data comes in. There is early evidence that job growth and consumer spending in the U.S. may be weakening while data from areas of Europe, such as Germany and Italy remain a concern. Brexit too continues to generate uncertainty that has not been resolved at the time of writing. China’s growth has recently slowed, though the longer-term impact of this is unclear, and trade tensions with the U.S. may have eased.
On a more positive note, much of the global economy is currently seeing growth albeit not at previous rates. The uncertainty concerning growth could, however, be a mixed blessing for markets. Of course, faster growth is typically better for shares. Yet, central banks are reacting to the uncertainty by potentially being slower to increase interest rates, or even potentially cutting them, which, in isolation, can be supportive of valuations for both shares and bonds.
Photo - Anthony Delanoix