There is something very weird going on at the moment. My pension pot has jumped in value by £20K over the past 2 months and my ISA has gone up by £5K in the past month alone. All the charts for the funds I am invested in are showing huge rallies. Surely this cannot continue, some of them are close to the peaks they reached before the credit crunch, yet many economies around the world are highly indebted and are only just limping out of recession.
I think it is only a matter of time before we see a global crash. Too many countries are heavily in debt and will need to cut public spending and implement tax rises else the debt rating agencies will have a field day. Various countries, such as the “PIIGS” (and the UK) could soon start seeing a repeat of the problems experienced by Greece, then we will see a global meltdown. Also I keep hearing worrying things about the Chinese no longer buying US government debt and actually starting to sell the US dollar and buying up gold instead. They have over $1trillion of US currency reserves, so if they dump the dollar it will lead to it weakening, causing further problems in the global economy (who will want to keep dollars if they are losing value?).
Basically I feel there are too many economic pressures building up. A hung parliament at the election in a months time could be the catalyst as far as the UK is concerned so I am tempted to liquidate or move into less risky funds nearer the election on May 6th. I think I’m going to have to keep a very close eye on everything.
JPM Natural Resources:
Allianz RCM BRIC Stars:
Skandia Global Best Ideas:
Aberdeen Asia Pacific: