Posted by: nmarsh February 27th, 2015
2014 was a turbulent year, especially on the Geo-political front with Mr Putin rattling sabres by annexing the Crimea and also providing support to the Russian separatists in areas which border with Russia in the Ukraine. The Europeans and Americans have responded by imposing sanctions which are beginning to bite on the economy in Russia. So far this has not dented Mr Putin’s popularity at home which is likely to mean that further instability will arise.
We have also seen the development of the brutal regime of the Islamic State of Iraq and the Levant (ISIS) who are trying to impose a Caliphate in the regions of Iraq and Syria. These terrorists seem well organised and may be difficult to bring under control.
In addition we have seen the oil price collapse which should eventually feed through into the economy. This is despite the current view that this has happened because of a slowing global economy which would have a negative impact on the markets.
The year ended with that recurring problem in Europe, the instability of Greece. Although leaving the European Union might, in the long term, be good for Greece, none of the political parties have this in mind. There is now the prospect of deflation in the Eurozone. Ultimately if the European Union is to come out of this crisis stronger there will need to be compromises.
On the home front 2015 sees the UK start the campaigning for power in the general election due in May. The most likely outcome is that there will be another coalition government. I think this election is the most difficult to call that I can remember.
With all the noise going on the important thing for your investments is to stick to your strategies and ride any storms. One thing we can have certainty over is that the markets will go up and down.