Well, we can’t say that last year was uneventful! It certainly kept us, and I’m sure you also, on our toes!
There have been numerous events worldwide over the past year that have affected the markets, but the two that stand out are the EU referendum and the US presidential election. The results of both were equally shocking – not just the results themselves but also the lack of large-scale immediate effects. Both events left us feeling that a new apocalyptic world had dawned and yet little seemed to have changed, either in the world or more specifically in the markets. Yes, ripples were felt and there were rumblings underground, but nothing like the extreme falls and losses that we were dreading.
So how did the events of 2016 affect us? Sterling has certainly felt the effects and is currently down more than 15% against the dollar. This is bad news for consumer products and we can expect to see sharp price increases over the coming years. It also means that interest rates will fall, so your money in the bank will be worth even less (if that is possible!).
The stock markets have been more volatile, as was to be expected. However, the British economy has continued to grow and this has bolstered performance and lessened the effect of some of the more harsh blows. The fall in sterling also means that share companies are benefiting from the currency exchange, boosting their profits and share prices, counteracting any negative market movements – particularly for those based mostly in mining and oil production. In fact, on the last day of Trading in 2016 these companies reached a record high, so let’s hope the growth we have seen in January 2017 continues.
2017 is sure to be just as interesting as 2016, as we begin negotiations to leave the EU. But amongst the uncertainly there will always be scope for market growth, which our Market Led portfolio’s will gain the advantage of.