• The markets started 2003 with a lack of confidence or stability and were very much risk averse. As...
• The markets started 2003 with a lack of confidence or stability and were very much risk averse. As the year progresses confidence will improve and ratings will rise.
• Risks have subsided particularly in terms of deflation for both the UK and US although it is still a risk in Europe. Earnings quality has improved, cashflow cover in the US has grown and simultaneously write-offs have diminished.
• Equity premium risk has fallen and investors are sitting on record levels of cash. There is a substantial amount of liquidity and this will drive the market going forward especially in the US with the huge amount of money held in money market deposits.
• Global growth is not great but neither is it catastrophic. It requires further stimulus, but there is not going to be a recession.
• Equities look attractive relative to gilts, the dividend yield on the FTSE 100 is quite high and the UK market currently looks cheap relative to global markets.
• The economic outlook is more positive, monetary and credit conditions have improved as has fiscal policy, especially in the US. Excess corporate debt has declined which is helping to repair balance sheets.
Targeting intermediary market
Represents £8trn in assets
Simplify and modernise
Retirement Planner Forum 2019