December 2018 Market Commentary


Craig Hendry

Craig Hendry

Managing Director & Chartered Financial Planner


The month of December brought no respite to investors with the main UK market retreating by more than 3% for the month. The 12% decline in the FTSE 100 during 2018 was its largest annual fall since 2008. It’s not only private investors feeling the effects of this sell-off but institutional investors such as corporate pension funds and investment fund managers as well.

Brexit, the US/China trade war, rising interest rates, slowing global growth, falling oil price and the recent US Government shut down have all had an impact on investment returns throughout 2018. Looking forward to 2019 and it would appear that investment volatility can be expected for some time yet.

With inflation relatively steady at 2.3% the Bank of England kept their base rate at 0.75%. In the US, the Federal Reserve raised their interest rate for the fourth time of the year to 2.5%.

Recent events have increased the feeling of uncertainty and may have led some to questions about whether or not to make changes to your investment approach.

It’s important to remember that while these events might seem concerning in the moment, they are not necessarily unique or unusual. Over the long term, investors who have a diversified portfolio and tune out the short-term noise surrounding these events have been rewarded for doing so.

 31 December 20181 month6 months12 months
FTSE 1006,728.13-3.61%-10.86%-12.03%
GBP/USD1.2734-0.18%-3.05%-5.74%
GBP/EUR1.1080-1.25%-1.16%-0.30%
Brent Crude (US$)53.80-8.36%-27.54%-19.18%
Gold US$ per oz)1,282.495.08%4.77%-2.66%

 

This blog is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action. Past performance is not necessarily a guide to the future. You may not get back the full amount of your investment.

Sources:

www.xe.com

www.bloomberg.com

www.bbc.co.uk

www.bankofengland.co.uk