The Federation of European Independent Financial Advisers

Another year is over and a new one has begun and while the financial outlook for 2019 looks unclear, one thing we can say with some certainty is that the financial markets have been anything but boring during 2018. Volatility has been at the fore, lately mainly as a result of political uncertainty in Europe and the UK, and the American/Chinese trade war.

On the monetary front, the belief is that US interest rate expectations are peaking and that we will possibly have two more hikes in 2019 at 0.25% each. With little chance of interest rate rises in Europe this will mean little respite for hard pressed savers.

In these uncertain times, many savers and investors are holding large sums as cash within their bank accounts and investments. Yet they are invariably getting no interest on these deposits. So action is required if they want the potential to at least meet inflation, currently standing at over 2.5%.

The expectation is that performance of the financial markets in 2018 should be a reasonable guide to what lies ahead in 2019, with greater volatility playing a major role. The feeling is that Equities will lead the way in 2019, albeit via a bumpy road.

Investors should expect lower and more variable returns than those seen in 2017 and the sentiment is that buy and hold is the best strategy. But to weather the storms ahead investors need to hold a well-diversified portfolio that is actively managed. Management of volatility is key so Multi-asset funds should be of interest to investors.

 

​​​​​​​​​The above article was kindly provided by Christina Brady, Associate Director, Spain – Costa Blanca, Blacktower Financial Management Group and originally posted at: ​​​​​​​​​​​https://www.blacktowerfm.com/news/648-2019-may-be-a-testing-timeblacktowerfm.com/