25 January 2019

Reasons to be Cheerful in 2019

There has been plenty for investors to worry about in 2018. What about 2019? Here's five things not to fear - according to Seven Investment Management.

1. A US Recession
The US is a major driver of global growth and some commentators fear a recession in 2019 which would be bad for us all. It is currently growing at 2.5% and Seven Investment Management say it would take at least 2 years for that to turn around into recession.

2. Trade Wars
Trade tariffs are bad for global growth. Only around 2.5% of worldwide imports are subject to that at present. And the expectation is that the US and China will see sense and reach a compromise that will not harm their economies too much.

3. The UK
Seven IM are confident that the Brexit shambles will eventually resolve into a deal with a broadly sensible outcome, which is not too painful for the UK.

4. A Corbyn Government
If Mr Corbyn comes to power, his bark will be severely curtailed by the range of views in his Labour party, by business pressures and economic restraints. He would be able to do little that would affect UK financial markets.

5. Volatility
Recent volatility has triggered alarmist headlines. While volatility has certainly increased, that is from the low levels seen in 2017. 2018 was much more at normal levels even though it may have felt bad, and 2019 is likely to continue that.

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