LET’S TAKE A MOMENT, REMEMBER 2018

MBABANE – The year 2018 started off with signals of synchronised growth across the globe, instilling a fair amount of optimism in investors.
However, as the year progressed, the harsh realisation of life emerged throughout the remaining part of the year.

We capture the main themes of 2018 that caused the outlook of investors to turn gloomy, and cover the conversations advisers need to have with their clients to make sure clients’ portfolios pull through this low-growth environment unscathed.
The year of trade tensions

Just as we thought the theme of synchronised global growth was set for 2018, international trade was disrupted by President Trump’s announcement of tariffs on imports – mostly aimed against China – in January. Nine months later the IMF revised its growth forecast for the global economy down for the first time in more than two years, citing escalating trade tensions and emerging market stress. Also in the course of nine months, the Yuan shifted from a two-year high to a decade-low.
Interest rates slowly returning to normal

During the year 2018, it also became clear that developed markets were leaving the risks of a deflationary environment behind with the US, the UK and the EU all experiencing mild inflationary increases. The Fed continued to hike its federal funds rate, up from 1.25-1.5 per cent at the start of the year to 2-2.50 per cent at the end of the year.

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