The key points are as follows:
- 2017-18 saw strong returns for diversified investors, but it was a story of two halves with strong December half returns but more volatility in the past 6 months.
- Key lessons for investors from the last financial year include: turn down the noise around financial markets, maintain a well-diversified portfolio; be cautious of the crowd; and cash continues to provide low returns.
- Returns are likely to slow and the volatility of the last six months is likely to continue. Global growth is good, this should underpin profit growth and there are minimal signs of economic excess that point to a peak in the global growth cycle. But rising US inflation and rates, Trump and trade war fears and the risks around China and emerging countries are the main threats.