In the world of investment advice we have seen a lot of activity in the markets over the last few weeks.
For many investors seeking for investment advice during last month will be glad that March is over!! With tense speculation and political deadlock, dominated by fears of Cyprus’s imminent default.
Banks in Cyprus were forced to close in the middle of the month amid mounting fears of a ‘run’ triggered by concerns over bailout negotiations between the country’s leaders and the so-called ‘Troika’ that consists of the European Central Bank, the European Union and the International Monetary Fund.
European leaders succeeded by reaching an agreement over the €10bn support package. Some would say it was is a bit harsh on Cypriot savers with bank accounts containing more than €100,000. They are set to loose a percentage of their savings to help with the bail out. The banks reopened towards the end of the month amid tight capital controls.
We saw Greek share prices plummeting and badly affected by the problems of its neighbour. The Athens Composite index fell by almost 14% during March. In Germany the Dax index rose by 0.7% during the month and by a total of 2.4% during the first quarter of 2013.
UK investors dismissed the disappointing economic data and downbeat Budget statement to see share prices in London to levels not seen since before the onset of the financial crisis. The FTSE 100 reached its highest level since 2008. Over the month, the blue-chip index posted a 0.8% rise and climbed by 8.7% over the first quarter of 2013 as a whole.
In the US President Obama signed into law spending cuts totaling $85bn and share prices ended March at a record high. The Dow Jones Industrial Average index posted an 11.3% increase over the first quarter and a 3.7% increase during March. Whilst, consumer confidence appears to have been undermined by the spending cuts, investors gained some encouragement from by some the economic data. It appears that the US Federal Reserve remains committed to supporting the US economic recovery.
In Asia, rising military tensions between North Korea and South Korea – and between North Korea and the US – dominated newsflow during March, and South Korea’s benchmark KOSPI index fell 1.1% over the month as a whole. In contrast, in Japan, the Nikkei 225 index climbed 7.3% during March and by almost 20% since the start of the year, boosted by renewed hopes over the country’s longer-term economic recovery.
With so much going on investors learn once again the importance of portfolio diversification and good investment advice.
The contents of this document do not constitute advice and should not be taken as a recommendation to purchase or invest in any financial product. The value of a market investment can go down as well as up and you may not get back the full amount, particularly in the short term. Before taking any decisions, we suggest you seek advice from a chartered financial planner.
