Investment Insights - Hot Topics March
Welcome to Balance: Wealth Planning's Hot Topics!
Balance: Wealth Planning's March edition of Hot Topics.
Every month, our financial planners will collate the latest 'Hot Topics' within the industry, which we will share with you. The purpose is to update you regularly as these topics are happening and help cover any frequently asked questions.
So, without further ado, please enjoy this edition of Hot Topics!
The S&P500
At the start of February, the S&P500 finished above 5000 points for the first time in its history, following a 20% rally that started in early November. Spirits are high in the US with the recent economy showing resilience, with low unemployment, inflation largely under control, and the sense that the Federal Reserve will deliver the illusive ‘soft-landing’.
It has been an astonishing 5-years with multiple global events taking place; worldwide lockdowns due to covid, Russia invading Ukraine, oil spiking above $90, rising interest rates and double-digit inflation. Yet, despite all of this, equities have been overwhelmingly positive over this period. Of course, there has been volatility and negative years in between, but all major indices have provided investors a positive return over the last 5 years.
FE fundinfo 2024
Our investment philosophy
Our investment philosophy has always been that ‘Time in the Market’ has a greater positive impact on wealth creation than ‘Timing the Market’. This has stood the test over the last 5-years, based on the fact that companies need to generate money for their shareholders. If this wasn’t the case, there would be no shareholders and suddenly the ability for the company to raise funds for future projects would dry up. While there will be bumps in the road along the way, good companies are successful because they are able to overcome difficult times.
If we look at Microsoft as an example, the company was founded in 1975 and listed on the stock market in 1986. Over this period, it has overcome 6 recessions in the US, the 1979 oil crisis, the dot-com bubble, raising interest rates in the 1980s and a global financial crisis. Whether you believe Microsoft is a good company or not, there is a reason it's one of the largest components of the stock market, its ability to overcome hard times.
Our investment website goes into great detail about our range of core and good practice portfolios and how we invest.
The future...
While we do not know what will happen in the future, we do know that uncertainty provides the potential for returns. But because of uncertainty life is a series of cost-benefit analysis events. We therefore have no choice but to manage risk. While some people may ignore risk or try to eliminate it completely, we know that not everything is controllable. You can’t manage stock market returns, but you can manage the risk you take. That’s why a portfolio constructed of globally diversified assets and based on the wisdom of the crowd, will allow you to benefit from uncertainty, while managing risk.
Please note: This update is not financial advice and is provided for information only. You should not take any action before speaking to a Financial Planner, who will confirm what suits you.
Please feel free to share it with anyone who may be interested. If you have any questions, please get in touch with your usual contact or investments@balancewealth.uk.
Please feel free to share it with anyone who may be interested. If you have any questions, please get in touch with your usual contact or investments@balancewealth.uk.