The start of the year brings a raft of predictions and forecasts for the investment year ahead. People love to express an opinion about the future and we are all free to speculate about what might happen in the economy and markets. The danger of course is when you base your investment strategy on an opinion.
But, if you insist on setting store by forecasts, here is a list of ten predictions you can count on coming true in 2016:
- Markets will go up some of the time and down some of the time.
- There will be unexpected news. Some of this will move prices.
- Acres of newsprint will be devoted to the likely path of interest rates.
- Acres more will speculate on China’s growth outlook.
- TV pundits will frequently and loudly debate short-term market direction.
- Some economies will strengthen. Others will weaken. These change year to year.
- Some companies will prosper. Others will falter. These change year to year.
- Parts of your portfolio will do better than other parts. We don’t know which.
- A new book will say the rules no longer work and everything has changed.
- Another new book will say nothing has really changed and the old rules still apply.
The future is always uncertain. There are always unexpected events. Some will turn out worse than you expect; others will turn out better. The only sustainable approach to that uncertainty is to focus on what you can control.
It should be evident by now that setting your investment course based on someone’s stock picks or expectations for interest rates, the economy or currencies is not a viable way of building wealth in the long term. Markets have a way of confounding your expectations. So the better option is stay broadly diversified and, with the help of an adviser, set an asset allocation that matches your own risk appetite, goals and circumstances.
Price Bailey Private Client provides clients with a complete, bespoke service that includes financial planning, tax advice as well as a discretionary portfolio management service to access, monitor and rebalance clients’ financial portfolio. The group currently handles investment portfolios for more than 400 clients with assets of more than £500 million.To find out more about our discretionary portfolio service, contact thes Private Client team today.