Demand for the precious metal has soared, as investors are increasingly wary about buying shares in uncertain times. The benchmark FTSE 100 index fell 12 per cent in 2018, with the 10-year-long bull market appearing to be drawing to a close and the volatility looks set to continue. Brexit is not the only threat, as rising US interest rates, a potential recession in Europe and crash landing in China are also rattling investors. However, financial experts are urging savers to keep their nerve and avoid panic selling. Brave investors could even take advantage of today’s reduced share prices.
The Royal Mint reported a 73 per cent surge in sales this month compared to last year and its director of precious metals Chris Howard said: “The trend is largely attributed to Brexit turmoil and market volatility in December and January.”
Investors buy gold as a store of value when other asset classes are falling and it should continue to shine as Brexit counts down. “We anticipate further increases in gold demand as uncertainty grows,” he said.
Joshua Mahony, senior market analyst at trading platform IG, said the News that the mighty German economy is slowing has added to the gloom: “Germany’s GDP rose just 1.5 per cent last year, which makes 2018 the worst for five years, dragging the euro sharply lower.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, said investor sentiment has swung wildly in recent months: “That is likely to remain the state of play until we see some light at the end of the Brexit tunnel.”
Global stock market volatility, the US-China trade war, and bad news from the UK high street have added to the febrile mood. He said: “In such circumstances it’s a good idea to remember the basics of investing. That means keeping diversified and focusing on long-term goals.”
Resist the temptation to time the market as future movements are impossible to predict.
The Share Centre’s Head of investments Andy Parsons said brave investors can turn market volatility to their advantage.
If investing for five years or longer keep cool and wait for the recovery: “It can be painful seeing portfolios in the red but this is a paper loss unless you actually cash in your stocks or funds.”
Bold investors should consider buying shares or funds at today’s discounted prices: “For many, the natural reaction is to sell but those who have a stomach for turbulence may find buying opportunities instead.”
Perhaps the safest way to do this is to drip feed money into investments. “Adopting a ‘little and often’ approach can reduce your exposure to volatility while you still benefit from the returns,” Parsons said.
This may also be a good time to reappraise your pensions, taxfree Isas and other investments to ensure your money is in the right place. He added: “Only buy what you know and understand.”
Chief investment officer at Phoenix Asset Management Partners, Gary Channon, said that even the Bank of England’s most pessimistic Brexit forecasts show the UK economy will be bigger in 2023 than it is today: “In the more likely scenario of a managed Brexit, the economy grows.”
First-time buyers are holding off amid Brexit uncertainty, as they believe prices will drop.
Many hope they will get more for their money in the months ahead, according to the research from financial services company OneFamily. Others say buying is risky with UK property market growth the weakest in six years.
MD Nici Audhlam-Gardiner said: “Market fluctuations may offer a golden opportunity to get on the housing ladder.”
Source : EXPRESS