April 2026 Investment Commentary

If 2025 was the year of tariffs, 2026 is dominated now by events in the Middle East and the Persian Gulf. Oil shocks are inherently inflationary. Whilst the trajectory of interest rates in developed markets was expected to be a shallow decline, rises now in the UK and USA cannot be ruled out to take money out of the economy to combat the new inflation.

Financial markets hate uncertainty and in March, share prices went down on the expectation that corporate profits will be lower due to higher input prices, and were highly volatile on news flow.

2024 and 2025 were better years for debt, such as loans to governments, known as Gilts, and loans to companies, known as Corporate Bonds, as their fixed interest became more competitive as interest rates have fell, and values rose. This reverses now.

Higher interest rates may help savers with a wider range of options for cash. However, the risk of a permanent loss of purchasing power increases as inflation spikes. Mortgage affordability will decline, meaning that house prices are likely to fall from current peaks.

*An increase in yield means a decrease in capital and vice versa.

Why most people do not need to act during periods of uncertainty:

Time in the market, rather than timing the market, is often the key to successful long-term investing. If you sell today, then when do you buy back? We believe investments should be held for the medium to long-term. Portfolios are spread and so not overexposed to one asset class, and this means you are highly unlikely to be fully invested in shares.

It is not advisable for medium to long term investors, whose attitude to risk and circumstances have not changed, to alter a diversified portfolio because of short term volatility:

• Fidelity International published data on returns from the FTSE All Share for fifteen years to the end of October 2025, which shows the effect of short-term volatility. The effect of missing the ten best days in the market is that returns are cut from 7.7% per annum to 4.7% per annum. Missing the best thirty days leaves returns at just 0.7% per annum.
• Therefore, consistently timing the market whether out or in is incredibly difficult. Nobel Laureate William Sharpe found that ‘market timers’ must be right 82% of the time to match the return realised by long term investors.
• This underpins our belief that investments should be held for the medium to long-term. Since 1899 the UK stock market has outperformed cash in around 75% of five-year periods and around 90% of ten-year periods. Since 1995, investing for at least fourteen years would have made money over any period in the FTSE All Share Index and twelve years for the MSCI World Index.

 Who needs to act, and if so, what action:

Investment risk refers to the range of returns, with the greater risk taken leading to the greater range of returns both positive and negative. If you feel your risk tolerance might have changed, or you want us to check the ongoing suitability of the portfolio based on your risk tolerance, please ask us for a fresh Risk Profile Questionnaire.

• If you a short-term investor, which means you are approaching taking benefits from your pension in 2026 have a known or emerging need to take a capital withdrawal from your portfolio, you need to contact us so we can assess your options.
• If you take fixed regular withdrawals from your pension or investments, sharp market movements are to be avoided, and it is necessary to review the ongoing sustainability of these payments. If you are spending less, then withdrawal reductions might be affordable.
• It is important to keep a buffer of six to twelve months of outgoings in cash deposits. Cash interest rates have improved.  

Issued: 1 April 2026. Expires: 1 May 2026