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Genuine election uncertainty, mixed with a dose of worry, could have considerably disrupted our economy

Investment Outlook for 2020 – Post General Election


The Chairman's View


The scale of the Conservative general election victory was remarkable and unexpected for a lot of people. The country can now look forward to 4 years of stable Government and finally, a resolution to the Brexit conundrum as promised.

We had noticed a marked reluctance from our clients to make further investments in 2018-19. Why? Genuine uncertainty, mixed with a dose of worry and the possibility of a far left Labour government that could have disrupted the economic outlook for many investors and businesses.

Not surprisingly, many private investors stood on the sidelines. It may have provided some peace of mind that they weren't 'wrong-footed' by making an investment that turned out not to be so great. The other side of the coin meant that investors sitting on cash had made absolutely no return during this extended period of indecision.

So what now? Here's my take on the investment landscape and some views about specific options.

Stability


In my opinion, the size of the Conservative majority means that we face a period of stability in Government which should feed through to how people feel. I expect greater confidence and more of a sustained positive outlook going forward.

Brexit


Getting Brexit done will mean a collective sigh of relief not just from Leave voters, but many Remain voters who have always accepted the result of the referendum. Whatever your stance on the whole process, we are where we are. It is up to us to make the most of the new opportunities that open up, while finding ways to mitigate any adverse impact through, for example, more complex import/export procedures.

Economy


All the forecasts say that our economic growth will be a little less outside the EU than inside it, not helpful as the decision is to leave. However, with the Conservative Government in place, I anticipate reasonable, responsible economic policies, even taking into account the ending of austerity. With good forward-thinking economic policies in place, the UK can thrive and become a dominant force once again.

Interest rates


With questions over future levels of economic growth and a year that has been difficult for the economy, interest rates are likely to remain low for a significant period – probably years into the future. There remains an enormous predicament for savers and investors seeking income from their capital. Avantis specialises in investments that typically deliver fixed returns between 8%-15% per annum to investors which consistently provide high interest in this low-yield era. Have a look at our current investments

Timescales


In my view, long term investments (say 5+ years) remain a terrible deal for investors. The world is too uncertain for us to have any real confidence in the situation in the far future. In general, the risk rises with the length of commitment, so choosing investments with a 1-3 year timespan is smart and is the least likely to throw up unexpected and unwelcome surprises. This 1-3 year span is where the majority of our investment opportunities lie.

Property


There has been a sustained recession in the housing market, which is not surprising given the uncertainty pre-election. After the result, there is a palpable sense of relief amongst homeowners, builders and developers. I anticipate a return to a favourable housing market with our estate agent associates looking forward to a much more energetic year.

This uplift in the real estate market is hugely positive as the investments we offer have a typical full repayment within 12 to 36 months. With a buoyant market, the security involved, when asset-backed with property, is second to none.

Next steps


We are now full steam into 2020 and what better start to the year than to turn a feeble annual return of 1-2% on your capital into 8%-15%! As an example, on a £100,000 investment at 12% per annum, your income can increase from £1,500 to £12,000 annually!

It is important to note that these investments are available to qualified investors and not retail investors. To find out all about investor qualification, please read this article.

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Investment decisions can be complicated. At Avantis, we are here to help you understand the investments that are presented to you. By understanding more about your investment goals, we can give access to opportunities that can achieve these goals.
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Disclaimer

Your capital is at risk. The value of your investment may go up as well as down. Past performance does not indicate future performance. There is no right for compensation in respect of poor investment performance and your investment is not covered by the UK FSCS. Avantis Wealth Ltd is not licensed or regulated by the Financial Conduct Authority and does not provide financial advice. The content of any promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose the investor to a significant risk of losing all of the capital invested. [Article 48(4) Financial Services and Markets Act 2000 (Financial Promotion) Order 2005] Please note that as a responsible company we require the self-certification of either a High Net Worth Investor or Sophisticated Investor statement prior to issuing any detailed information by way of an Investment Memorandum.