The last few years have been good for financial markets as a result of low interest rates, the benign economic environment and growing economies in the Far East and the United States.
My current thoughts are that this environment will continue, however, one must be wary of markets running away; but with stock market valuations about 10% above long term averages, I do not believe we are heading into a danger zone yet. If one bears in mind that the FANG stocks in the US (Facebook, Amazon, Netflix and Google) have led the way forward, the market is somewhat more reasonably priced than it first appears, which allows for a slightly more rosy view on markets generally.
Regular readers of Prospects will know I am concerned about the political situation in this country and what the effect a change of government could have on domestic companies, the value of the pound and the level of our own gilt market. Therefore, we are increasingly taking a more global stance in the way that we look at investments which I believe is sensible today and in the longer term, both from a political point of view but also in the context of the modern globalised world.
Therefore, you will increasingly see from our research department global stocks being written about, as we adopt a more sector based approach to research that encompasses the global universe of companies, rather than a bias towards the UK. For example, rather than doing the analysis on just Lloyds and HSBC in the UK, we might now look at Bank of America, BNP or Svenska Handelsbanken in a bid to determine the optimal way to access the banking sector.
This more global approach is one that we’ll be talking about more in the future, but in light of the aforementioned concerns about the political situation at home, is an important change to our approach. Obviously I hope my doom-mongering about the UK is overplayed, but one must be realistic about the way things stand today.
You will notice the various developments we are making to the services we provide, including the Client Portal and I do hope that as many people as possible will take advantage of the information and technology improvements. If you feel we could improve anything in relation to the services we provide please do not hesitate to let us know as it can only help improve the services clients receive.
At the same time, as all of our clients are aware, we are an independent company dedicated to looking after private clients and if you want to recommend us to your friends and family, there will always be a friendly face at JM Finn who would be delighted to look after them.