The UK election result of 8 June is an electoral disaster for the Conservative Party and more than challenging for the whole country. The intention of achieving a larger Tory majority backfired in a tremendous way, and now, we are headed for a hung parliament and a coalition government. The Prime Minister, Theresa May, is undoubtedly weakened, and I think we will not see her remain for more than a few months.
The impact on the country can be summed up in one word: uncertainty.
That’s what the markets hate most—not knowing where things are headed. The election is going to have an impact on:
The economy
Brexit negotiations (or lack of them)
Future fiscal policy
Exchange rates
Interest rates
Business investment and performance
And more…
Frankly, it’s scary. Let’s have a go at trying to project what impact this might have on savers and investors in the next year or two.
The uncertainty, combined with the potential adverse impact of Brexit, is likely to depress the economy, meaning less money for people to spend. There is the risk of recession again. The government will have less money to spend at a time when people are demanding more investment in public services. Increases in taxation seem inevitable to me.
Interest rates are likely to remain ultra low. Raising rates now would choke off even further weakened consumer demand. And make it more expensive for companies to borrow. The result will be a continuing state of ridiculously low rates of return for savers, making no sense at all for anyone who needs the interest on their savings to provide for their living costs.
Whilst the stock market, at least the FTSE 100, has so far proved resilient, my feeling is that we are headed downwards into an extended bear market. That will mean falling share prices, investment portfolio’s being worth less and pension funds diminishing. On top of that falling company profits may put pressure on dividend payments, meaning that you make no money from capital growth and less income from reduced dividends.
All in all, a very tough few (maybe more than a few) years ahead for savers, investors and those with pension funds.
But all is not lost. At Avantis Wealth we select investment chosen using the F.R.E.S.H investment strategy. We sit outside mainstream investments—which is just as well. Our clients typically receive fixed returns of between 7% and 15% annually. That’s enough to be transformational. Whether your savings or investments are held directly with cash, or through a tax efficient vehicle such as an ISA or pension scheme, our investments could make a huge difference to your income now, or fund values later.
Of course, you need to know more. Ask for a complimentary copy of the F.R.E.S.H investment strategy report and we would be pleased to send you one. Call us on +44 1273 447 299 or send us an email at invest@avantiswealth.com, and you can also visit our website. In this world of uncertainty and poorly performing investments, there’s an opportunity for you to do far better!