Were Global Markets impacted following the US Government Shutdown ?

We have thankfully seen a relatively small reduction in the global markets following the impasse in the US over the Federal Budget / Obama Care issue that has led to a shutdown of the government. It remains to be seen what the real effect of this will be over the next few weeks. I believe we are becoming used to these kind of political “shenanigans” between Democrats and Republicans, it is now the way politics is conducted in the most powerful world economy.

But this is an unwelcome threat to the global economy. It is particularly irritating as the global markets have all been improving after the reductions in asset values during the last few months. This was due primarily to the twin issues of QE in the US and the potential liquidity problems in China that have now been resolved or at least deferred.

So, this is no doubt a temporary problem but how long the impasse will prevail before the two parties reach an agreement. US politics is inextricably linked to the US economy which in turn affects the global economy. This effectively means that a handful of people ( Republican hardliners ) are holding the world’s markets to ransom which is clearly absurd, but that is the reality. The markets are very aware that this is a political showdown which will be sorted out eventually and have reacted accordingly. At the moment the situation appears relatively benign.

Navigating choppy waters - our Portfolio Management Service (PMS) 

What affect does all this have on our clients’ investments and how should we react to protect them from these events? This kind of volatility is unwelcome for the majority of investors who seek secure and sustainable growth with their investments. My personal belief is that it is necessary to have a diversified approach and in August I changed my portfolios within the PMS to include an exposure to US equities, a reduction in exposure to Bonds and a focus on Asia. I generally use 10 funds in my portfolios and adjust these, as required, subject to market conditions.

If you have not already subscribed to the PMS then I would urge you to do so as these days it generally pays dividents to be proactive to mitiate the negative impact of world events.

Is there an Alternative to Capital Markets ?

I am also in favour of certain income producing, asset based investments that are uncorrelated to equities. Amongst other alternative investments, I am currently recommending a Managed Gold Trading Fund, a Leisure Parks Property Fund and a Student Accommodation Fund. These are all performing very well indeed and in my view will continue to do so notwithstanding the volatility in the equity and bond markets. The Managed Gold Fund provides a Fixed Dividend of 12% per annum with capital protection. The other two investments are producing double digit annualised returns and are secured on real property assets.

There are no charges to invest in these funds although there are varying early surrender penalties. If you take a mid-long term view this is a very attractive proposition. Please let me know if you would like more details on these funds.