Due to global events, Inflation figures show high interest rates are here for longer than expected. The new war in Israel is pushing up oil prices, and China/Russia ties are strengthening, causing alarm for the US and other US currency-dependent economies.
Investors may consider rebalancing investment portfolios, as high interest rates are expected to continue.
The latest US CPI data and minutes from the most recent Fed meeting point towards another rate hike of around 25 basis points. Nigel Green, CEO of deVere, comments, “The Fed will be conscious of growing uncertainty of the trajectory of the world’s largest economy and the risks of overtightening – especially in times of growing geopolitical uncertainty; while at the same time, want to avoid complacency in the continuing battle against inflation.”
With everything going on, diversification is your secret weapon. Resilience, adaptability, learning, and a growth mindset are vital to portfolio health. Look for quality fund managers managing quality funds that are diversified.
Sectors like tech, energy and healthcare are doing well, but staying diversified and investing regularly is essential. Stock markets over a 10-year period have always beaten inflation, so keep your head down and chat with your financial advisor to ensure your portfolio is regularly rebalanced for optimum returns.