Mike Marigold is the CEO of Montgomery Charles. He has over 30 years’ experience of providing his clients with the financial guidance they need to get more ‘life out of life’.
Embarking on investment ventures can seem like a daunting task, especially when faced with the challenge of ‘timing the market.’ Our seasoned experience, spanning over three decades, has taught us a valuable lesson: the market’s highs and lows are unpredictable.
With this in mind, our philosophy at Montgomery Charles is not to gamble on timing, but to embrace consistent returns over substantial, 5-10 year periods – an approach that history has shown us time and time again to be correct.
Having said that, there are instances when certain indicators suggest potential opportunites in the market. It’s my belief that the current scenario with inflation could represent such an opportunity.
At the moment, inflation — a key economic barometer — is showing signs of cooling in robust economies, retreating from the peaks of the previous year. For instance, in the UK, inflation has decreased from 11.1% to 4.6%, and in the US, from 9.1% to 2.1%. This significant drop is a clear indicator that economic helms are being steered towards a more balanced state.
Why does this matter for your investments? The trajectory of interest rates, set to temper inflation, plays a critical role. As interest rates ascend, bond yields may become less appealing, and stocks could wobble under the pressure of increased borrowing costs. Conversely, as interest rates decline, we often witness a surge in bond prices and a rally in stock markets.
Montgomery Charles are well-placed to capitalise
Our diverse portfolios – a blend of Bonds and Shares curated through meticulous fund selection – are positioned to make the most of these market shifts. Our prudent approach has paid dividends even amid market volatility — our portfolios have remained profitable, with our high-risk ventures yielding returns upwards of 4% (over the last 12 months, to 5/12/23). Given the wider economic pressures, that’s an outcome we’re incredibly proud of.
In the current climate, cash still holds its ground, offering returns of 4-5% in top-tier financial institutions. However, with the potential dip in interest rates, overstocking cash reserves could mean missing out on the gains from investment portfolios.
While asserting a market bottom would be presumptuous, the economic indicators, particularly the imminent bond rally, provide a compelling case for investment consideration.
Conclusion: Ready to Invest?
The market beckons with indicators that herald a bond market rally. Although the bottom is never a certainty, these signals are too strong to ignore for those looking to invest.
At Montgomery Charles, we equip you with the insight to make informed decisions that resonate with your long-term financial goals. Being fee-based, we’ll never try and ‘sell’ you risky financial products, and our holistic approach is entirely focussed on your life and your needs.
I hope this article has given you food for thought – please do get in touch if you want to find out more.
Mike
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All information correct as of December 2023. Any money invested carries an element of risk and you are not guaranteed to get back the money you invested. This article does not constitute advice and you should consult your financial adviser prior to any action.
