News & Insights

Global Recession or Golden Opportunity?

If you already hold equities (shares, bonds, stakes etc.) then be prepared to see a downward turn in your portfolio this month…China´s position has seen ALL markets worldwide follow a downward trend, but fear not, and DO NOT PANIC, for many this could prove to be a blessing in disguise – withdrawing funds is not the answer.

Commodity producing countries such as Brazil are certainly suffering because of low prices but many other parts of the world are better off, seeing lower input costs in manufacturing. Lower oil prices are also resulting in lower diesel and petrol prices, boosting disposable incomes for consumers. It is widely believed that the US will be the first major economy to raise interest rates with much commentary centered around September as the likely starting point. However, the recent further fall in the oil price suggests that inflation levels will remain subdued for the foreseeable future.  Nevertheless, even if rates were to rise next month, it is likely to be a token increase, with subsequent movements very slight indeed. In the UK, inflation is also conspicuous by its absence and any moves seem unlikely until well into next year.

So what does all this mean for YOU?  Share prices have suffered a very sharp correction in the last few weeks, albeit after many stock markets reached all-time highs in the Spring. Valuations are around the average for the last twenty years, so the current weakness offers a great entry point. Moreover, dividend yields remain well above government bond yields, underlining the income attractions of equities. Low commodity prices are likely to keep the lid on inflationary pressures, removing the need to raise interest rates. This suggests that bond yields are likely to remain low for some time. Therefore, while stock markets may remain volatile over the coming months, investors shouldn´t be afraid of taking advantage of the recent dip in prices to add to positions where they can.  

In layman´s terms, if you have cash in the bank with an expected low yield, and you are not in any rush to utilise the funds, then there has never been a better time to consider investing medium to long term in the equities markets, with products available that have potential to achieve returns in excess of bank interest rates.   

Other News

New Governor Brings Confidence to Financial Management Industry

Cayman Island FlagThe Cayman Islands has a new governor following the announcement that Martyn Roper OBE, a career diplomat and corporate leadership veteran, has been appointed to the role. He takes over from Anwar Choudhury, who had recently faced a number of complaints regarding his conduct.

The move is largely thought to be positive step for financial management services in the Cayman Islands, as Roper has said he will make it a priority of his role to “listen and learn” from those around him.

Mr. Roper brings a wealth of experience to the job. He was most recently minister and deputy head of mission for the U.K. in Beijing, China, but has worked in other notable capacities, including as the UK Ambassador to Algeria, Deputy Head of Mission in Brasilia and, of particular interest to the financial management industry in the Cayman Islands, as First Secretary for Economics and Development with the Organisation for Economic Cooperation and Development (OECD) in Paris.

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How Much Money do I Need to Retire in Spain?

Spanish flag and EurosThere is so much to recommend around retiring to Spain. However, the many opportunities inherent in a move to the country also bring a great many challenges. As such, if you want to join the approximately 250,000 British expats who currently live there, you will need to consider a number of important questions, not least the cost of retiring in Spain.

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