Monthly Chatter
Well that’s the first month of 2023 almost over, time seems to get quicker year on year, indeed I remember as a young lad thinking that I would be ancient when I reached the age of 60 in 2030, now only 7 years away, yikes!
As a 70’s child I experienced they joys of stay press trousers, flowery shirts, nylon football strips, adidas 4 stripes (the affordable adidas), only coming home when mum shouted for you and the Bay City Rollers.
My parents and others like them experienced general strikes, rising interest rates, low wages and a high cost of living, it almost seems like deja vu today. The country remains uneasy and unhappy and it’s difficult to see it changing in the near future.
Big and unpopular decisions were made by Sunak’s government late last year and time will tell if these will have the desired effect.
And earlier this month he set out his key priorities, or foundations as he called them, for 2023
- halve inflation this year to ease the cost of living and give people financial security
- grow the economy, creating better-paid jobs and opportunity right across the country
- make sure our national debt is falling so that we can secure the future of public services
- NHS waiting lists will fall and people will get the care they need more quickly.
- pass new laws to stop small boats, making sure that if you come to this country illegally, you are detained and swiftly removed.
These five priorities are to deliver peace of mind, so that we know things are getting better, I admire his conviction as most politicians wouldn’t set out a scorecard but I was disappointed with the lack of ambition.
I talk about your priorities everyday with ambitious goals and objective’s and strategies for achieving, without ambition what do you have?
The new year has seen the markets start relatively well, with 2022 behind us we will all be hoping that volatility reduces and growth recommences.
We also will see many of the tax changes announced in the budget implemented, one of the key announcements was about Capital Gains Tax and the reduction in the allowance down to £6000 for the forthcoming tax year and then to £3000 the following year.
If you are impacted then we’ll be in touch with options but remember this allowance is widely used not just with investments managed by financial planners but for those with property portfolios and the like, so don’t hesitate to get in touch if you want to discuss.
If last years message was ‘hold the course’, I hope that this year’s will be ‘steady as she goes’ but regardless I wish you all my very best wishes for the year ahead and I look forward to working in partnership with you.
Regards
Darren.
Market Update
As investors acclimatise to a period of higher inflation and interest rates (albeit below peak-2022 inflation perhaps), a number of investment opportunities should emerge, at least in the short term.
Of course, a few significant risks remain.
- Will the anticipated recession be more severe than analysts expect?
- Has inflation passed its peak?
- Will there be an escalation to the war in Ukraine?
- Will China effectively re-emerge from COVID?
Annual US inflation fell in December to its lowest level in more than a year, in a further sign that price pressures have peaked amid the Federal Reserve’s historic campaign to tighten monetary policy. The consumer price index, published by the Bureau of Labour Statistics earlier this month declined for a sixth consecutive month, registering an annual increase of 6.5 per cent. While still near a multi-decade high, this was the lowest level since October 2021, and represents a notable decline from the 9.1 per cent reached in June. Compared with the previous month, prices dropped 0.1 per cent.
US inflation fell last month to it’s lowest level in more than a year a sixth consecutive month of decline amid Fed tightening. While still near a multi-decade high, the annual US inflation figure of 6.5% marks the slowest pace since October 2021. However the Fed has indicated they don’t expect this to fall back to previous levels and as such interests will continue to increase this year.
The conflict in Ukraine shows no sign of abating and as such the issues around global food supply and energy are set to continue throughout 2023. There are rumours of a spring offensive and the impact this could have if it occurs is unknown and until there is a resolution the uncertainty that this causes will continue and as you all know markets don’t like uncertainty.
China has re-opened, albeit to date only circa 50% of their workforce has returned and while the expectation is that this will see supply chains re-opens, it brings with it the risk that demand for commodities will increase to a level that can’t be satisfied which in turn could impact inflation.
So, the global markets are waiting to determine the impact.
We have become more bullish, believing there are conditions in place for some asset classes and sectors to perform positively but the message is one of cautious optimism, volatility will continue, currency risk remains, which can have quite a big impact on performance, but after such a disappointing 2022, the outlook is more positive.
Monthly Insight
We’ve just have Burns Night so re-publishing a poem seems appropriate. I shared this last year , poem by Edgar Guest (1881-1959) who was a prolific American poet – publishing a poem every day in the Detroit Free Press for 30 years. Known as the People’s Poet, Guest wrote easy-to-read poems about many relatable topics. He wrote encouraging life messages about topics such as family and work.
This particular poem encourages readers not to give up when they are faced with challenges. Even when things are not going well, keep pushing on. You never know how close you are to success and making it to the other side, I thought it was appropriate.
Keep Going
When things go wrong, as they sometimes will,
When the road you’re trudging seems all up hill,
When the funds are low and the debts are high,
And you want to smile, but you have to sigh,
When care is pressing you down a bit,
Rest if you must—but don’t you quit.
Life is queer with its twists and turns,
As every one of us sometimes learns,
And many a failure turns about
When he might have won had he stuck it out;
Don’t give up, though the pace seems slow—
You may succeed with another blow.
Often the goal is nearer than
It seems to a faint and faltering man,
Often the struggler has given up
When he might have captured the victor’s cup,
And he learned too late, when the night slipped down,
How close he was to the golden crown.
Success is failure turned inside out—
The silver tint of the clouds of doubt,
And you never can tell how close you are,
It may be near when it seems afar;
So stick to the fight when you’re hardest hit—
It’s when things seem worst that you mustn’t quit