Investing can be a great way to put your money to work. However, with so much advice and jargon out there it can be very difficult to know where to start. Investment trends are investor signposts that give the general direction in which markets are going, highlighting areas with the most growth potential. Having insight into these will simplify the process and help you to make confident, informed decisions about where to invest your money.
In recent months it has been noticeable that certain areas of the market have begun to outperform others. In particular, smaller companies have been seeing stronger performance compared to larger peers – which has been aided by the fact that many of the fears around the global economic outlook have diminished since the beginning of April.
On the other hand, US equities remain expensive by historic standards and this has caused some investors to rethink their geographic asset allocation. In addition, the US dollar has fallen against sterling since the beginning of April, which makes any US assets bought by UK investors worth less in sterling terms.
Meanwhile, bonds have largely avoided losses year to date (once you factor in the relatively healthy income they provide). This is despite heightened uncertainty around the global economic outlook and the risk of higher interest rates. This heightened unpredictability has also weighed heavily on corporate profits which have struggled to grow in the current environment. Yet with the first-quarter earnings season now over, some investors will be looking to reassess corporate performance.