Market Outlook Q3 2018
We are currently rebalancing our portfolios to ensure we reduce our exposure to risk during these volatile times. Diversifying this way will enable us to access the greatest returns possible for our portfolios. We will be taking profit from shares which have performed very well for us as well as cutting losses from shares where we don't see much improvement on the horizon. All the trades we make support our view of value investing and we're optimistic we'll make the most of the current market environment.
The major issues at the moment is the current trade-war that is brewing and the U.S yield curve which issues recession warnings for the economy, although a recession seems unlikely before late 2019.
We have started to shift away from U.S equities as we see the valuations across the board to be overvalued.
Furthermore, our increase in allocation towards emerging market economies such as Europe, Asia & India show great promise for the growth in the future. Our long term view is that these emerging markets will outpace the returns of the U.S market over the next 3-5 years.
The threat of a trade war and the rising U.S dollar can cause problems for our emerging markets. However, it affects all parties including the U.S as economic growth will be hurt across the board.
Therefore, we have kept a higher weighting in cash than usual to ensure we have that buffer to buy into any opportunities that present themselves.
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