Worldwide Financial Planning

Don’t get discouraged when the values are not going up. If the markets aren’t rising, you shouldn’t really expect to make returns during that period. There are doldrums, and you must sit them out. You can’t pop into a money market fund in cash and hop back into the market when: ‘it’s ready’.

In the UK inflation is coming down slower than hoped for and in the US economic growth is stronger than expected. Both banks are waiting for the impact of previous rate hikes to take effect and are happy to sit on their hands for now.

With inflation eroding investments, it’s easy to become uneasy and to look for a quick snap fix to what a perceived problem is, and headlines are a lure.

US consumer spending helped to deliver surprisingly strong economic growth and the now familiar good news is bad news response followed. The logic goes that if consumer demand is this strong and wages are rising above inflation then the Federal Reserve will act more aggressively to tame inflation.

When push comes to shove, the fickle corporate bonuses of the big corporations, or the movement of a house price will mean nothing in comparison to that security of calling that place, your home.

It is usually good to treat a single month’s data with a healthy dose of scepticism, however, the monthly CPI reading is now stuck just under 7% where it has been since July. High interest rates are now having the restrictive effects intended on consumer activity, but inflation seems to have stopped reacting to the downward pressure. The bank’s choice is stark; is the priority inflation or economic growth?