As Patrick Connolly, financial planner at Chase deVere, said, it is near impossible to know for sure what to do with investments in this environment, but he urged a cautious approach.
“I think generally the economy is okay, but there are a lot of risks out there that we know about with Brexit, European elections and Trump at a time when stock markets are riding high it sounds like a dangerous time to focus on one area,” he said.
Disputing the glumness of the OECD and concerns over rising markets, Connolly said the “UK economy doesn’t look that bad” currently, but he was worried over what the future held and added: “There may still be opportunities for growth but in terms of capital allocation we say you should be diversifying your portfolio.”
Julian Chillingworth, chief investment officer at Rathbones, suggested the OECD figures were not the ones to note and he is anticipating the Treasury to review their own growth forecasts and push expectations of growth up.
Despite the OECD’s concerns of an apparent “disconnect” between financial markets and the prospects for the economy, Chillingworth said investors should stick close to the FTSE 100, where 70% of earnings are made overseas, to avoid the UK small and mid-cap sector and be wary of retailers who could suffer most from a fall in consumer demand.
