Month: July 2025

Trade tariffs continued to affect investment markets in June 2025, though uncertainty did start to ease. However, rising tensions in the Middle East may have affected the performance of your investments. Read on to find out more.

Remember, it’s often wise to take a long-term view of your investments when reviewing returns, rather than focusing on short-term market movements.

In June, the Organisation for Economic Co-operation and Development (OECD) cut its global growth forecast to 2.9% in 2025 and 2026, down from 3.1% and 3% respectively, on the assumption that tariff rates in mid-May are sustained.

The OECD said: “Substantial increases in barriers to trade, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have marked adverse effects on growth prospects if they persist.”

Similarly, the World Bank lowered its growth forecasts for nearly 70% of all economies. It estimates that the 2020s are on course to be the weakest decade for the global economy since the 1960s.

Trade tensions ease, but uncertainty in the Middle East leads to volatility

On 2 June, a European market sell-off started in early trading as investors continued to react to the trade war. Stock indices, which track the largest companies listed on each stock exchange, were down, including Germany’s DAX (-0.25%), France’s CAC (-0.5%), and the UK’s FTSE 100 (-0.27%). Markets in the US also opened lower, including the S&P 500 dropping 0.3%.

However, there was some good news in the UK. Following the announcement of a new defence review, stocks in the sector jumped, with Babcock, one of the largest Ministry of Defence contractors, leading the way with a rise of 3.8%.

Germany’s sluggish economy received a boost on 4 June when a tax relief package worth €46 billion between 2025 and 2029 was unveiled. It led to the DAX rising 0.9%.

After weeks of tit-for-tat tariffs between the US and China, a trade deal was struck on 11 June. The US said a 55% tariff, inclusive of pre-existing levies, would be placed on China. The deal led to Chinese stocks rising. Indeed, the CSI 300 index, which tracks the largest stocks on the Shanghai and Shenzhen markets, was up around 0.8%.

Despite poor economic data from the UK, the FTSE 100 closed at a record high on 12 June. Among the top risers were health and safety device maker Halma (2.8%) and Tesco (1.8%).

In contrast, European markets dipped, with the DAX (-1.35%) and CAC (-1%) both falling.

The Iran-Israel crisis led to stock markets falling when they opened on 13 June. In London, the FTSE 100 was down 0.56% and almost every blue-chip share was in the red. It was a similar picture in Europe and the US, with indices dipping.

On 24 June, Donald Trump, president of the US, declared there was a ceasefire between Iran and Israel. It led to geopolitical fears easing and markets rallying around the world. However, some fears remain.

UK

UK economic data released in June was weak.

Data from the Office for National Statistics (ONS) shows the UK economy shrank by 0.3% in April. This was partly linked to trade tariffs as exports of UK goods to the US fell by around £2 billion.

In addition, the ONS revealed the rate of inflation remained above the 2% target at 3.4% in the 12 months to May. The news led to the Bank of England’s Monetary Policy Committee voting to hold interest rates.

However, think tank the Institute for Public Policy Committee said the central bank was harming households by not cutting the base interest rate. It also added that GDP was lower than expected because interest rates have been kept too high for too long.

A Purchasing Managers’ Index (PMI) involves surveying companies to create an economic indicator. A reading above 50 suggests a sector is growing.

In June, PMI readings for May show the manufacturing and construction sectors were contracting, but they had improved when compared to a month earlier, leading to hopes that a corner has been turned. In addition, the composite PMI, which combines service and manufacturing surveys, moved back into growth.

Europe

Eurostat figures show the rate of inflation across the eurozone fell to 1.9% in May, down from 2.2% in April, taking it below the European Central Bank’s (ECB) 2% target for the first time since September 2024.

In response, the ECB lowered its three key interest rates for the eighth time in the last 12 months.

There was also positive news from PMI data. The eurozone continues to hover just above the 50 mark that indicates growth, and German business activity returned to growth in June. As the largest economy in the eurozone, German activity is important to the bloc, and factory orders were also higher than expected.

Ireland is leading the EU in terms of growth. The country had expected its GDP to grow by 3.2% in the first quarter of 2025, but exceeded this with an impressive 9.7% boost. The jump was linked to strong exports in pharmaceuticals and other key sectors as companies tried to get ahead of tariffs.

US

In the 12 months to May 2025, the rate of inflation in the US increased slightly to 2.4% and remains above the Federal Reserve’s target of 2%.

A PMI conducted by the Institute of Supply Management shows the US manufacturing sector is slipping due to tariff uncertainty. Indeed, 57% of the sector’s GDP contracted in May, up from 41% in April.

The data from the service sector was also negative, with figures showing it contracted in May for the first time in June 2024, and new orders fell at the fastest rate since December 2022.

However, separate data suggests that businesses are feeling more optimistic about the future.

The National Federation of Independent Business’s Small Business Optimism Index increased three points in May. It was the first rise since Trump took office at the start of the year thanks to trade talks taking place between the US and China throughout June.

The US economy also added 139,000 jobs in May. The number was slightly higher than forecast and could suggest that businesses feel confident enough to expand their workforce.

Asia

Data from China showed it wasn’t immune to the effects of the trade war.

China’s National Bureau of Statistics data shows inflation was -0.1% in May as prices dropped. Deflation affecting the country highlighted the importance of the US and China reaching a trade deal.

In addition, manufacturing activity in May shrank at the fastest pace in two and a half years. Firms were hit by falls in new orders and weaker export demand. The PMI reading was 48.5, down from 50.4 in April.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Do you consider yourself an optimist or a pessimist?

The “blue dot theory” could suggest that humans are hard-wired to be pessimists, after psychologists discovered that once our brains are primed to see something (such as a blue dot), we see it everywhere, even when it’s not really there.

Read on to learn more about how the blue dot theory could be affecting you and how you can stop it from negatively impacting your life.

The “blue dot” theory

In 2017, Harvard researchers asked participants to identify blue dots among thousands, ranging from very blue to very purple.

During the first 200 trials, the participants could accurately identify the roughly equal proportion of blue and purple dots. However, as the experiment progressed and fewer blue dots appeared, participants began to label more obviously purple dots as blue.

To confirm their findings, the researchers attempted another trial with the same concept where they replaced the blue and purple dots with photos of threatening and non-threatening expressions. Once again, as they reduced the number of threatening photos, participants still identified the same ratio of pictures as threatening.

They concluded that our brains are designed to look for threats and problems regardless of our environment or whether the issues exist.

In practice, this often affects social lives. If your brain is looking for problems, you are more likely to interpret other people’s expressions, comments, or silences as judgments against you.

The blue dot theory also means that when you solve the big problems in your life, instead of being pleased with your progress, the smaller annoyances become more significant to you to fill the space.

How to combat the blue dot effect

If your brain is hard-wired to be pessimistic, you might be thinking there’s nothing you can do to change it – but have a bit of optimism!

The more aware you are of how the blue dot theory impacts your day-to-day life, the easier it is for you to change your mindset and combat the negative effects it can have on your relationships.

1. Stop projecting assumptions

The blue dot theory often leads us to leap to assumptions about other people based on our own thoughts, feelings, or intentions.

For example, you might interpret your colleagues’ neutral behaviour as personal attacks on you based on insecurities. Next time you find yourself wondering if someone you know is displeased with you, stop and consider whether you have concrete evidence to prove this.

Separating facts from assumptions can help you to quash the negative thoughts and remind you that most people are too focused on themselves to analyse your every move.

2. Try to avoid snap judgments

Our ability to make fast decisions is an evolutionary device that has kept humanity alive for centuries, but it can also lead to you making wrong judgments about your loved ones.

For example, if your friend seems quiet, your first assumption might be that they are upset with you. However, this snap judgment is based on limited evidence and might not be true.

Next time, you find yourself making a snap judgment about something important, pause and allow yourself to wonder what else could be the reasoning behind someone’s behaviour. For example, simply asking your friend what is wrong could help you to support them and deepen your friendship, rather than assuming the worst straight off the bat.

3. Practise gratitude

The blue dot effect can make your life seem a lot worse than reality by turning every inconvenience into a monumental problem and every social interaction into an anxiety-inducing spiral.

Although we can’t prevent ourselves from finding problems and seeing the bad parts of life, it’s important to focus on the good things.

Take five minutes out of your day to reflect on all the progress you have made in life and some good things that have happened to you recently. You can even record the things you are grateful for in a journal every morning for a positive start to your day, or every night to help you sleep peacefully.

While it can seem difficult to find the positives at first, practising gratitude can help you weaponise the blue dot theory against your brain. If you prime yourself to focus on the good things in life, you are more likely to see them, helping you to have a more optimistic outlook on life.

4. Be compassionate towards yourself

We are often our own worst critics. When we’re quick to judge ourselves, blue dot theory means we are even faster at interpreting other people’s actions as judgments against us.

Being kinder to yourself will mean you assume other people have good intentions and can help you put a positive spin on any problems you might face.

To start practising self-compassion, try talking to yourself as you would someone you care about. Every time you catch yourself thinking negative thoughts, consider whether you would say those things to someone you love, and offer yourself the same kindness.

After more than five decades at the helm of Berkshire Hathaway, legendary investor Warren Buffett has announced he’s retiring at the age of 94. He’s credited with turning the failing textile maker into a successful holding company. In May 2025, the BBC estimated Berkshire Hathaway was worth $1.16 trillion (£870 billion).

Considered by many to be the most successful investor of the 20th century, Buffett has regularly featured on lists of the world’s wealthiest people, despite giving away vast sums.

While Buffett has a huge number of resources at his disposal, many of his idioms may be useful for ordinary investors, including these five.

1. Invest with a long-term view

Throughout his career, Buffett has focused on the potential long-term value of stocks and shares.

Indeed, he said: “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

It’s a useful reminder that trying to generate quick returns could lead to investors missing out on long-term gains. With so many different factors influencing the value of investments, it’s impossible to consistently time the market.

While investment markets often experience short-term movements, historically, they have delivered returns over longer time frames. Investors who plan to hold investments over the long term could benefit as a result.

2. Avoid investing FOMO

Buffett earned the moniker “oracle of Omaha” for his ability to make long-term investment decisions, and he did it without following the crowd.

Investing FOMO (fear of missing out) leads some people to invest in a way that doesn’t align with their strategy because they believe investments are “good” or “safer” if others are choosing them. However, making investment decisions based solely on what others are doing may be harmful.

Buffett once said: “When everyone wants in on it, that’s probably not the right time to jump in.”

When everyone is talking about the latest stock that’s sure to deliver big returns, the buzz has often already led to prices rising. As a result, following the latest trends could lead to disappointment.

It’s also important to note that what is a “good” investment for one person may not be right for another. As your circumstances and goals will play a role in your investment strategy, acting based on FOMO might mean you make investment decisions that don’t align with your financial plan.

3. Invest in what you know

Buffett once advised budding investors that they didn’t have to be experts in every company, but only had to evaluate companies within their “circle of competence”. In other words, stick to what you know, even if an opportunity outside of your knowledge sounds enticing.

Recognising when you could benefit from expert advice or support is beneficial too.

Buffett considered this when thinking about his estate plan. He’s instructed the trustee of his estate to invest 90% of his money into a passive fund, so his wife doesn’t need to make investment decisions day-to-day.

As a financial planning firm, we could help you create a balanced investment portfolio that you can have confidence in, including if you want to take a hands-off approach.

4. Don’t be seduced by a “bargain”

Finding a bargain, whether you’re out shopping or assessing investments, can be thrilling – everyone wants to get something for less if they can. However, looking only at the price when you’re weighing up an investment opportunity might mean you make a decision that isn’t right for you.

Instead, look at the bigger picture. How would the investment fit into your wider portfolio, and does it align with your investment goals?

As Buffett said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

5. Make investing part of your wider financial plan

When you’re setting out or reviewing an investment strategy, it can be easy to look at it in isolation. Yet, by making it part of your wider financial plan, you could improve the decisions you make.

For example, your financial circumstances and goals will play a role in your investment risk profile. Incorporating these areas when weighing up investments could help you strike a balance that suits your needs. Without this approach, you could find yourself taking more risk than is appropriate.

Buffett once noted: “It is insane to risk what you have and need to obtain what you don’t need.”

Contact us to talk about your investment strategy

An investment strategy that’s been tailored to your needs could lead to returns that help you reach your long-term goals. Please get in touch to talk to us about your investments.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Opting for a “boring” investment strategy could be the route to returns that allow you to make exciting lifestyle decisions in the future. If you’re looking for excitement in your investments, read on to find out why that approach could lead to disappointments.

The media can make investing seem exciting

When you’re reading financial headlines, they might say things like “stock market soars in best day ever” or “the best companies to invest in right now”. In other media, investing is often dramatic too. For example, in The Wolf of Wall Street, the main character, Jordan Belfort, is shown making a huge fortune through investing and fraud.

Yet, despite the perceived excitement of investing, acting on emotions, even ones that feel positive, could harm your decisions. The excitement of finding a tip that declares a company will be the “next Apple” could lead to you skipping further research, like assessing the risk profile of the firm and whether it fits into your existing portfolio.

Investors might even feel excited about the risks they’re taking – the anticipation of waiting to see if they were “right” can be addictive. So, some investors may take more risk than is appropriate because it adds to the excitement.

As a result, viewing investing as something that should be exciting has the potential to affect the long-term performance and could mean you’re at greater risk of losing your money.

So, what’s the solution? For many, it’s taking a boring approach to investing.

Why boring investments work

First, what does a “boring” approach to investing mean?

Focusing on your long-term goals and building an investment strategy around this and other factors, such as what an appropriate level of risk is and other assets you might hold. You’d try to remove emotions from your investment decisions and, instead, use logic.

If you’ve heard the mantra “buy low, sell high”, this approach might seem like it wouldn’t work. Yet, historically, investing with a long-term outlook, rather than responding to short-term market movements, is a strategy that’s worked for many investors.

March 2023 data from Schroders highlights the challenges of trying to time the market.

If you’d invested £1,000 at the start of 1988 in an index of the largest 100 UK companies and left the investment alone, it would have been worth £15,104 in June 2022 – an annual return of 8.31% on average.

However, if you tried to time the market and missed just the 10 best days, your average annual return would fall to 6.1% and you’d have £7,503 in June 2022, less than half of the amount had you remained invested.

While trying to buy low and sell high might be exciting, even just a few mistakes could mean you miss out on long-term returns.

Of course, it’s important to note that investment returns cannot be guaranteed, and past performance isn’t a reliable indicator of future performance. Yet, it can provide a useful insight into why taking a long-term view when making investment decisions could be beneficial.

Boring investing could lead to exciting lifestyle opportunities

A boring approach to investing doesn’t have to mean the outcomes are dull. In fact, taking a long-term approach could mean you have more opportunities to create the lifestyle you want.

A long-term investment strategy might allow you to tick items off your bucket list like:

• Retiring earlier to travel the world
• Sampling dishes at award-winning restaurants
• Creating a disposable income to attend gigs or the theatre
• Purchasing a holiday home to spend time with your family.

Rather than looking for excitement when investing, finding it in your long-term plans and what investment returns may allow you to do could be far more rewarding.

Contact us to talk about your investments

If you’d like to talk about your current investments, or you have a sum you’d like to invest, please get in touch. We’ll work with you to create a long-term investment strategy that’s aligned with your goals and financial circumstances.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Retirement can be a tricky time to manage your finances. Often, it represents a huge change as your regular income might stop and, instead, you start to deplete your assets. So, it’s natural that emotions might influence some of the decisions you make if you let them, but it could be harmful.

Here are three different ways emotions could affect your retirement outlook and how to manage them.

1. Retirement excitement could lead to overspending

Retirement is often an exciting milestone and one you might have been looking forward to for years.

So, if you’re focused on enjoying the moment and ticking off some of those long-awaited dreams, you’re not alone. Perhaps you’ve booked an extravagant holiday now you don’t have to fit it around work, or you’ve finally got around to making the home improvements that have been on your mind for ages.

Celebrating the next chapter of your life is important – you’ve earned it – but it often needs to be balanced with a long-term outlook.

Many retirees have a defined contribution pension, which doesn’t provide a regular income. Instead, you’ll need to manage how and when to access your savings to ensure they provide financial security for the rest of your life. There’s a risk that if you spend too much too soon, you could run out in your later years.

Meeting your financial planner to discuss how much you can sustainably withdraw from your pension could help you strike the right balance. Knowing that your plan considers your long-term financial security could mean you’re able to enjoy those early retirement celebrations even more.

2. Investment market movements could lead to emotional decisions

During your working life, your pension is usually invested with the aim of delivering long-term growth. As modern retirements often span decades, it could make sense to leave your pension or other assets invested when you give up work to potentially generate returns.

One of the emotional challenges of investing is the temptation to react to market news. Whether it’s negative or positive, attention-grabbing headlines can leave you feeling like you need to make adjustments to your investments.

You might be excited about an opportunity or fearful of a potential downturn, and make a knee-jerk decision based on these emotions.

However, as with investing when you’re working, a measured, long-term approach often makes sense for retired investors. While investment returns cannot be guaranteed, markets have, historically, delivered returns over a long-term time frame.

Try to tune out the noise and emotions when you’re reviewing your investments and focus on your goals instead.

Reviewing your investment strategy as you near retirement could help you feel more confident about your long-term finances and identify if adjustments might be necessary, based on your changing circumstances rather than emotions.

3. Fear of overspending may hold back your retirement dreams

While some retirees risk running out of money, the opposite can also be true.

Despite having saved diligently during their working life for a comfortable retirement, some people find that their concerns mean they feel nervous about using their pension or other assets. It could mean that a retirement that promised much is disappointing, even though they have the funds to turn their goals into a reality.

You might think of financial planning as a way to grow your wealth, but that’s not always the case. Financial planning is about helping you use your assets to reach your goals. In retirement, that could mean encouraging you to spend more if you’re in a position to do so.

If you’ve been putting off booking the safari you’ve been looking forward to or simply counting every penny when you go shopping, a meeting with your financial planner might be just what you need.

By understanding your assets and how the value of them might change during your lifetime depending on your spending habits, you can set out a budget that’s right for you and, hopefully, find the confidence to really enjoy this chapter of your life.

A retirement plan could help keep emotions in check

A retirement plan that’s been tailored to your lifestyle goals and financial circumstances could give you the confidence to dismiss potentially harmful emotions and focus on getting the most out of your retirement years. Please contact us to arrange a meeting with our team.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

This guest blog was written by Chris Budd, who wrote the original Financial Wellbeing Book as well as The Four Cornerstones of Financial Wellbeing. He founded the Institute for Financial Wellbeing and has written more than 100 episodes of the Financial Wellbeing Podcast.

Life can be complicated, can’t it? There are so many distractions, sometimes it’s hard to keep focus on the main objectives of life, one of which surely must be to maintain our wellbeing.

Being happy doesn’t come easily. It takes work and nurture. We need to actively ensure that we spend our time and money promoting the things that will bring us joy.

Some of these things are fairly obvious – a roof over our heads, food on the table, good health, love, and kindness.

Some are less obvious. Indeed, some are actually part of the problem, things we think will bring wellbeing that turn out to be false objectives, like a bigger house or an expensive car.

There is one particular piece of research, however, that reveals the secret to a happy life, something that has been shown to be the main contributor to our long-term wellbeing. It is the thing on which we should surely focus our time and money, and, as a result, our financial plan.

The Harvard longitudinal study

Researchers at Harvard University asked a cohort of young people – some of them Harvard students, and some from poor areas of Boston – what they thought would make them happy as they went through life.

Overwhelmingly, these young people reported two anticipated sources of wellbeing: money and fame.

The researchers then went back to those young people every two years. They asked them how happy they were, and what factors were helping or hindering their wellbeing.

They have been doing so ever since, for the last 80 years or so. They brought on new cohorts, and so now have a huge bank of information about the contributory factors to a happy life and long-term wellbeing.

The secret to wellbeing

Perhaps unsurprisingly, those who became famous reported no higher levels of wellbeing than those who did not. What may be more of a surprise, however, is that those who became wealthy also reported no greater levels of wellbeing than those who were not wealthy.

There was, however, one overriding factor that affected the levels of wellbeing – the quality of their social relationships.

Note that it is not the quantity, but the quality.

Those who reported high quality levels of social relationships were happier than those who did not. This even ran so deep that those who reported being lonely often died younger.

The application to financial planning

Buying a luxury item might make us happy for a while. However, it is unlikely to have a significant impact on longer-term wellbeing. If owning bigger and more things is not a source of wellbeing, but quality of social relationships is, how does this impact our relationship with money?

The key question of financial planning is: how much is enough? This Harvard study tells us that we need to extend this question – how much is enough, and for what?

One of the keys to increasing financial wellbeing is having a clear path to identifiable objectives. What are those identifiable objectives that your financial plan aims to make real? Do they include any references to the quality of your social relationships?

In practical terms, this might be a trip to visit friends or loved ones living far away. It could be moving to a four-day week to spend more time supporting a charity or other organisation you are involved with. Or you may change jobs to one that pays a bit less, but allows you to walk the kids to school and tuck them into bed at night. I’m sure you could think of many other examples.

With so many distractions and complications, it is so easy to get distracted from the main contributor to our wellbeing. This is what your financial plan is actually for. To create that clear path to identifiable objectives, and then to review progress regularly. In this way, you can ensure that your financial plan is helping you to focus on the things that are the secret to happiness.

You can read all about the Harvard study on happiness in the book The Good Life by Robert Waldinger and Mark Schulz.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.