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May 2010 - Market uncertainty

The UK general election result and the Greek debt crisis have caused uncertainty throughout the financial markets. Stock markets fell sharply and currency exchange rates have been volatile. One thing that has remained consistent, as economies try to keep out of recession, is low interest rates, ensuring there is no easy answer for investors.

The last 14 months have however seen a strong recovery on global share prices and in the last 7 months commercial property funds have performed strongly after their previous falls.

These trends continue to show that markets overact on both the upside and the downside, but that the top and bottom are very hard to call. Timing investments is therefore as difficult as ever, but long term investors should sit tight during the falls and wait for the recovery which inevitably follows. There are some solid companies with excellent trading outlooks which currently have attractive share prices and good dividend prospects. Remember that FTSE growth does not include dividend rates which can be at around 3% or higher – on their own a better return than cash.

So whilst we are waiting to see how the new government’s economic policies shape up, don’t ignore you your own objectives. Contact us to review your investments or if your attitude to risk has changed.

Individual Tax Rates for 2009/2010 - unchanged for 2010-11