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Quarterly investment update – turbulent times

The second quarter of 2022 was a tumultuous period with negative returns seen across most asset classes. Julian Broom, our Chief Investment Officer, reviews what’s been happening over the past few months in world markets.

Structural change across world markets is now something all of us need to accept, and the challenges seen this year with inflation mean that central banks are unable to prop things up any longer. Economists and central bankers have been closely watching inflation, but only very recently have growth forecasts started to be cut back. It remains to be seen how deep the cuts will go particularly given that both global equity and bond markets have suffered significant falls. Talk of a recession still looms, and interest rates will continue to rise in an attempt to help alleviate the situation.

The next three months will show us just how important those inflation challenges are, and whether long-term impacts on global growth will bear out. The exception to all this is China, which has bucked the trend slightly after enjoying significant economic support from its government. Here the situation is now beginning to ease, leaving the stage set for some solid growth opportunities.

As things stand the most attractive picture for the second quarter would see a short and sharp increase in interest rates, buying opportunities arising from the resulting volatility and then something of a reset in the global economy to reflect the new landscape of lower growth and inflation.

Quarterly investment update

For more details – read our quarterly update

July Update

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