The coronavirus pandemic and subsequent lockdowns (especially in China, with its zero-COVID policy), supply chain bottlenecks, the war between Russia and Ukraine, Chinese sabre rattling over Taiwan, “potential” energy shortages (in Germany in particular), inflation, monetary policy (shrinking central bank balance sheets), rate hikes at unprecedented speed and in large steps – there have been plenty of things to make life somewhat uncomfortable for investors. New challenges are emerging every day.
We are facing a high degree of uncertainty and it seems to me that many participants in the financial markets are standing on the sidelines and watching how things unfold. There is also often talk of an imminent recession, bringing job losses and/or falls in income. A loss of purchasing power due to negative real interest rates is something that affects us all, and the hunt is on for alternatives to sitting on cash.
I am frequently approached by people wanting to know how to protect their assets. Is now the time to dump equities? Or is it time to get on board? Will the dollar carry on falling? Isn’t this a good time to buy sterling? What’s going to happen to the euro? Are interest rates going to keep on going up? Do crypto assets offer a chance to get rich quick at their current level?
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