A Wake-Up Call!
6 June 2025
To all Financial Friends
Over the last 12 months our students have seen good returns over their holdings. Ranging from +43% in gold (so yes, £10,000 invested made pure profit of £4,300 in just 12 months) American equities +21% (pure profit of £2,100) and global infrastructure +8% profit of £800. Out of the 11 asset types held by many students nine have made profit and two, being Index Linked Gilts and Natural Resources, losses of -6.52% and -8.12% respectively.
The wake-up call. From a welfare economy to a war ready economy
Little doubt that most of us let 'them' or 'they ' get on with the politics of it all while expecting life to go on as normal for us. We trust and pray that 'they' get it all sorted and that making us war ready will be enough to stop wider war developing. If you cope with listening to the news, you will have heard Prime Minister Starmer saying that the threat to us now is "more serious, more immediate and more unpredictable"
Spending on defence is, under NATO pressure, to be forced to a level of 5% of our national gross domestic product (GDP). This is a huge increase in UK expenditure. Such demands cannot be met without serious consequences our living standards. In the upcoming spending review, next Wednesday, we are to hear chancellor of the exchequer Rachel Reeves announce increases in defence, infrastructure and health expenditure. This will be at the expense of other public expenditure budgets being cut.
Our economy needs growth against the background of unpredictable Trump and little money in the UK bank account. The government is taking the gamble of increasing our nation’s debt by significant amounts, specifically to fund the growth we need. This feels like you or I borrowing on credit cards to invest for our future even while we already struggled with paying off the debt we created just to maintain our own living standards. This is a true reflection of how our economy stands in my perception.
Now it is more important than ever to ensure your money is in the right place
Your money, pensions , ISA's and savings may soon be needed to be relied on as a part of supporting your living standards and life-style. In our recent commentaries where we seek to look two steps ahead of the markets, we brought our students attention to the outlook for gold, infrastructure and more lately to defence assets. Consumer staple stocks and money market funds have also featured. Across the board these assets have proved prudent and often profitable.
In uncertainty it is prudent to diversify your investments across different assets. However, my commentary is that you may need to be aware of the need to be more specific as to the assets held for your future against this fast-changing world. Following the spending review next week I shall be writing again to highlight awareness of investment opportunities that will arise from the Rachel Reeves announcements. Whatever the conditions there is always profit to be made in the markets.
Rob, Tom, Sarah and Michael!
As we face the challenges ahead together Your Financial Friend is drawing upon additional expertise to support every aspect of our financial lives and security. You already experience Robs market awareness, information and guidance. Because the future may need more specific asset choices, Tom our stockbroker is here to counsel on the use of individual shares, such as in the defence sector for example. Sarah is our chosen specialist on all matters protection securing your family, yourself and your business life. Michael is our chartered tax specialist helping with estate planning, wills and much more. Legitimate defence against erosion of your earnings and assets.
