The commodity slow down has affected the world over the last month or so, however investments have generally rebounded from the volatility of the start of the year.
There is still a lot of interest in what China is doing, as the world has relied on their growth to fuel their own economies. There is still a lot of uncertainty as to how well they are going.
The US though is definitely stronger, but not exactly flourishing. If they continue to improve then you can expect interest rates to rise from zero.
Interest rates of 20% like in the 80s seem like a lifetime ago don’t they? Most of my retired clients will remember those days and struggle to get their heads around 2.5% 6 month term deposits and falling. The general consensus is that rates will fall again.
Investing for income has certainly become challenging, the only positive being that inflation is effectively nil so buying power is not being eroded as fast.
The first step in investing for income is actually working out how much you are going to spend each month or week. This will determine whether you are going to be able to generate enough income or whether you will spend down your capital over time.
In simple terms there are two types of portfolio investments, those with capital that grows over time and those that generate income solely. Shares and property generally fit the first category and Cash, fixed interest and bonds the second.
In order to survive the current climate it Is likely you will need a combination of all. Outside of your comfort zone? We will try our best over the coming months to add some educational value through our site.