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Financial Markets Commentary

May 2023
  • Inflation continues to be a significant global economic headwind; Consumers seem to think price increases are understandable so are prepared to pay these higher prices, at the moment anyway. Businesses raising profit margins at this time are being accused of something known as “greedflation”. Interesting to note inflation peaked at 27% in 1975.

  • Banks are still in trouble, but fears of a systemic crisis have passed, there is little similarity with 2008 when bankers believed American people would never default on their mortgages which they got badly wrong.
  • Inheritance Tax receipts increased again so it’s just as well Foundation Financial Planning regularly work on reducing Inheritance Tax which in some cases is an unnecessary tax for estates to pay.
  • I have mentioned before, we were watching corporate earnings very closely last week. Most of the big tech firms did very well. It’s also interesting to note that rather astonishingly Alphabet, Apple, Microsoft and Meta have net cash and securities of $250 Billion between them (as of week ending 30/04/2023).
  • In times like these most economists believe the priority should be to hold investments that are likely to hold their value in the longer term such as real assets or equity investments that have pricing power i.e., not investments that have rapid growth prospects.
  • At annual review FFP continue to adjust client portfolios that consider the changes to the global economy as referred to above.

Please note that:

  • This information in isolation is not financial advice.
  • Past Performance of investments is not to be relied on and the value and the income from investments can go up as well as down.
  • It is advisable to regularly review your investments.

Gianni Campopiano
Managing Director & Chartered Financial Planner

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