Overview
Markets around the world have had a busy few months. Interest rates, inflation, and global events have all played a part in how investments are performing. While there have been ups and downs, there continues to be caution towards further interest rate reductions in some markets as inflation continues to be a concern for many and in combination with increases in borrowing.
Our outlook articles are published to help customers understand global events that could impact investment performance. Remember that the value of investments can go down as well as up, and you could get back less than you paid in. Past performance is not a reliable guide to future results.
Staying Focused on Your Long-Term Goals
It’s natural to feel concerned when you hear about market changes or global events. In these times, it’s important to stay calm and keep sight of your long-term saving and investment objectives.
United States
The U.S. stock market has been strong recently, with major indexes like the S&P 500 reaching new highs. This is partly because investors expect the U.S. central bank (the Federal Reserve) to cut interest rates soon, which can help businesses and the economy.
Technology companies are still doing well, but other sectors are starting to catch up. Inflation is easing, but it’s still something to watch.
Outlook: The U.S. economy looks steady, but there are still risks. It could be worth considering a balanced mix of investments and thinking long term continues to be important.
United Kingdom
UK inflation is still higher than the Bank of England’s target, sitting at around 3.8% in August and September. Interest rates remain at 4%, and the Bank has said it will wait for clearer signs before making more cuts with general concern about their ability to cut rates further this year due to inflation and an uptick in borrowing.
The economy is growing slowly, and household budgets are still under pressure from higher prices.
Outlook: Inflation should start to fall next year, but things may stay uncertain for a while. Watching interest rate changes and government plans will be important.
Europe
The Eurozone economy is growing slowly, and inflation is close to the European Central Bank’s 2% target. Interest rates are low, and the ECB is expected to keep supporting the economy.
Outlook: Growth is likely to stay modest, for investors, it's worth keeping an eye on economic updates and trade developments.
Asia
Markets in Asia have been mixed. Japan’s stock market has done very well, helped by strong company profits. Other countries, like South Korea and India, are also performing strongly.
Outlook: Asia offers opportunities, but global trade tensions and currency changes could affect returns.
China
China’s economy is slowing down. Spending by shoppers and factory output have both weakened, and the property market is still struggling. The government is likely to introduce more measures to support growth.
Outlook: There are challenges in the short term, but sectors like green energy and technology could offer long-term potential.
Markets can be unpredictable, but staying focused on your long-term goals is key. Don’t panic over short-term changes — investing is a journey, not a sprint.
Scottish Friendly doesn’t provide advice. If you’re seeking advice, you should contact a financial adviser. Advisers may charge for providing such advice and should confirm any cost beforehand.
