Portfolios, Politics and More
2 July 2024
To all Financial Friends
Please enjoy today's update and commentary. Feel free to book a time to talk should you wish www.calendly.com/yourfinancialfriend
I asked a 7 year old boy this question, "suppose you woke up tomorrow morning in 10 Downing Street as the Prime Minister of England! What would be the first thing you would do?" His reply amazed me. The 7 year old said, "simple, I would move into number 11 and then I would have all the money!!" In two days time (as I write) Rachel Reeves, Labour's shadow chancellor is likely to lose her shadow and become the real thing, Chancellor of the Exchequer. I wonder how she is feeling. Would you like her possible job?
Whether you are Rishi, Rachel, Sir Ed, Sir Keir or even Nigel or anyone else, the one goal you must achieve is growth. Growth in our economy. Without serious growth, the government in power will not have the money to do the things needed to survive in the global system in a competitive fashion. Reports show that global investors have been withdrawing funds from the UK as the expectation of a Labour government seems likely.
Performance
Eleven investment assets represent the main holdings of Financial Friend investors. Over the last month to date, once again, global technology leads the field with a gain of +9% and American Equities by +5.73%. The next four holdings all show small gains with the final five showing small losses with gold losing it's shine at -6.29%
Political Extremes
Whoever it is, how will the next Government achieve the growth needed to plug the holes in our roads and the economy? Get the whip out and make us all work harder for less pay would be the quickest answer maybe? That sounds like far right government control, now threatening in France, Germany and the Netherlands. The swing to the right politically will affect the global economy as the threat arises. Even here the Labour Party is seen as more centralist and of course Reform is making it's voice heard here in the UK.
All this may reflect the dissatisfaction people and society feel today. Change is demanded. So, the world and the world of money continues to change. Looking two steps ahead of the market and understanding with me (if you agree) that risk and potential reward are driven by economic and political changes, we are on the alert Watch this space.
Profitable Returns
The recent gains, in just the last twelve months, in most of your investments, has been great and reflects the markets hopes of future falling interest rates and control over inflation. Technology funds will have delighted profit takers with profits of 42% and American equities at +19.25% with Gold at +14%. Even Jupiter's Corporate Bond Fund made over 12%, Natural Resources up by +12% and well diversified Mixed Asset funds up by over +10%! The now infamous inflation linked gilts and bonds at the bottom of the list yet again at -2.12%
What Are The Options?
How will the next UK government boost the economy and make our uneasy public happier? Unlikely indeed in the short term but maybe in 5 years time, ready for the next election perhaps? Whoever they are what are their options? Increase our taxes. Print more money. Borrow more money. Not much else. None of those are good things to do but a mix of those things are likely to develop.
Looking Ahead
Once the election is over and we can see the direction being taken, we will be looking two steps ahead of the market and keeping a wary eye on the drift to the right of politics.
Remember that whatever happens, there are always profits to be made in the stock market. Where the money goes, the price of what the money invests in always rises.
Guidance and information as you make your own decisions always available to subscribing members. Always happy to talk and help if you use the link here to book a time to do so www.calendly.com/yourfinancialfriend don't hesitate - always good to hear from you.
PLEASE NOTE: A financial or economic commentary like these, are written to explain, interpret or give an opinion on economic events and markets to help readers understand what’s happening and why it matters. Designed to help you make informed decisions of your own by making you aware of opportunities, risks and potential rewards in the market.
