World Cup Exit May Have Long Term Economic Benefits

England finishing fourth in the FIFA World Cup may benefit UK investors in the long term says IFA Antony Barton.

In a study conducted by Goldman Sachs, the winning country of a FIFA World Cup tournament can typically expect an economic boost to markets by around 3.5% during the month following the final.

All good for 2018 winners France then, except this economic bounce is not only short lived, but is followed a period of under-performance compared to other European economies by 4% the following year.

“Although the UK missed out on the field and an initial feel-good factor in the stock markets, we are expected to go on to reap the long-term benefits by avoiding a slow to markets,” said Antony Barton, Senior IFA at Robertson Baxter.

“This, of course, is good news for investors in the UK, who have seen an uncertain start to 2018 due to the anxiety surrounding the global economy and an FTSE100 drop of 1%.”

Other factors such as increases in both UK and US inflation, and political risks such as President Trump’s escalating trade war with Europe and Asia, have all contributed towards the uncertainty in the global market. A win for the national team could have simply added to this list.

“Like football fans backing several teams to limit the risk of disappointment in a losing team, investors would be wise to do the same during the current economy,” added Antony.

“The global economy is continuing to grow and rising interest rates are a vote of confidence in economies despite the backdrop of uncertainty.

“Investors should continue to look at the long term nature of their investment and consider diversifying their investments with a varied approach to their investment portfolios – especially while stock prices are not looking expensive by historical standards.”

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