With the curtains now drawn over 2020, I thought it would be fitting to highlight some of the major questions that have been on the lips of my clients through last year.
This is the first of three FAQ blogs we will be posting over the next couple of weeks. I hope you will find the answers to these questions useful!
Is it worth investing in the UK market today?
When it comes to investing, everything should be a long-term investment. That means looking for investment opportunities that represent good value far into the future.
Of course, a diversified and well-managed portfolio is crucial, but at the end of the day, I've got to make my decisions based on where the value lies in the markets.
Does the UK market represent better value than its developed counterparts around the world? Although it may not look it, I would probably say it does. Whether that value is going to be seen in the short-tem, it's impossible to say for sure because of uncertainties in the market and in the economy.
The UK’s market performance over the last 12 months has paled in comparison to its global counterparts, and it's still behind them today.
But my job is to find future value in the markets and, from what I can see, as long as the UK market recovers, now may be an excellent time to buy into it.
Regardless of past performance, I've got to give my crystal ball a rattle and direct my clients to what I think is going to be good value for them and having good exposure to the UK is where I'd be placing my bets at the moment.
So, in terms of investing, the UK market seems like a good place to hedge your bets for now, but what about its longevity in the future when we compare it to emerging markets like China?
The UK is different to everywhere else in the world. In a financial sense, we are lucky to be living here because it's pretty stable on inflation and interest rates, and it's a good overall performer. I think that we have some of the strongest financial institutions anywhere in the world, and we're probably one of the most mature markets out there.
There is still so much unknown in emerging markets that it's difficult to know if they are a better investment than more mature markets like the UK. India may well become the next China, and the emergence of solar power may mean other countries with nothing but sunshine and oil could control the world's energy in the future! If that is the case, then these nations may be set for some very good growth indeed.
We know the world is going to change, but how this change is going to affect the markets is more difficult to determine. However, the one thing we do know is that economic maturity is still going to come from the UK.
So, whilst it might not set anyone's hair on fire, the UK is still likely to be a force to reckon with when it comes to financial institutions and services.
I hope this has been useful and if you have anything else to add I’d love to hear from you. To find out more feel free to get in touch by emailing firstname.lastname@example.org
The views expressed in this article are those of the author and do not constitute financial advice. Applewood Independent Ltd is authorised and regulated by the Financial Conduct Authority. For financial advice designed for you and your specific circumstances, please contact the author using the contact details provided in this article, or alternatively contact the Applewood Independent Ltd office on 01270 626555.
The value of your investment can go down as well as up and you may not get back the full amount invested.
Past performance is not a guide to future performance.