Market Commentary - Year End 2009 - 2010-01-01



Regular readers of this commentary will note that our thoughts this quarter are much the same as they were 3 months previously. Global markets had another strong period, despite some early profit taking in October, and ended the year on a high.

However, doubts remain as to the sustainability of recovery once financial stimulus packages are removed. Whilst there is still decent value to be found using historical valuation methods, some doubt remains as to whether we are through the full effects of the recent financial troubles. Policy makers are hoping that when Quantitative Easing and other such measures come to their necessary end what will be left is a return to self-fulfilling and sustainable economic growth. Of course the risk is that these measures are not addressing the key structural issues in Western economies and therefore when stimulus ends growth may not occur.

The world however is a large place, and undoubtedly there will be many investment opportunities at company, sector and regional levels over coming years. It is certainly going to remain important to have mechanisms in place so that pension and investment portfolios can adapt and benefit from these changing tides of opportunity. We believe that our combination of regular client reviews and outsourced active fund management will help our clients to position accordingly.

In the UK, other political concerns loom large in 2010 and the results of the election are eagerly awaited by both consumers and markets. Regardless of the result, it looks inevitable that further tax rises will follow the election and therefore an increasingly important part of financial planning will be focussing on ways to mitigate the fiscal burden. We encourage clients to utilise tax-efficient vehicles such as ISAs, pensions and other planning vehicles, but with many changes to legislation occurring it is very important to seek advice before making any decision in order to comply with the current rules.

Opinions expressed represent the views of Stan Gaskin Ltd at the time of writing, They are subject to change and should not be interpreted as specific advice. Please discuss your personal circumstances with an adviser prior to making any investment decision.

1st January 2010.