Long-term investors are being advised to keep their faith in equities, as markets in the US reach an all-time high and UK equities continue to improve.
According to the investment committee at Preston-based financial advisory group, Taylor Patterson, equity markets have continued to strengthen with the US S&P500 index exceeding its 2007 peak on the back of a positive corporate earnings season and improving macroeconomic data.
There is also news from the European Central Bank (ECB) that interest rates have been reduced to a record low of 0.5%.
Jason Street, director at Taylor Patterson, believes the ECB’s decision should encourage investor confidence. He said: “We continue to see central banks adopting loose monetary policy in an effort to kick-start growth and boost confidence in markets.
“However, such action always comes with the risk of higher inflation, which attacks the purchasing power of capital such as cash and government bonds. Governments have a clear incentive to allow inflation to rise, eroding the value of their debts, but this can often be at the expense of price stability.”
“Our advice is to take a long-term view,” adds Jason. “If you are an investor who is not looking to move their money in the next five years, speak to your financial adviser now to ensure you have a well-diversified portfolio and you understand how the asset classes within that portfolio will perform and behave.”
To organise a free portfolio review, contact Jason Street on 01772 555073 or email email@example.com.