Carpe Diem - Seize the day
Taking the long view will pay off for investors!
It was heartening to hear the Chancellor Philip Hammond remind us in his Autumn Statement that the UK economy remains resilient despite this current period of global uncertainty.
He put his money where his mouth is by freeing up an extra ￡23 billion to invest in rail, telecoms and housing infrastructure over the next five years and help boost the country's output.
It was the perfect opportunity for the Government to instil a new-found confidence into the future of the country and one that shows that the UK is not dwelling on the past but very much looking to the future.
And it is a move that has not gone unnoticed by shrewd investors from across the globe who see this as the perfect opportunity to buy into the UK before prices soar.
The Chancellor’s statement provides further evidence that now is the time to seize the moment and invest in UK projects.
There is certainly a far stronger indication that the UK is weathering these challenging times than Brexit doom-mongers would like to imagine – and nowhere is this better reflected than in foreign investment figures.
Just this summer the International Trade Secretary Liam Fox, announced record investment from abroad. The 2,213 investment projects secured in 2015/16 constituted an 11% increase on the previous year.
That puts the UK firmly ahead of all other EU countries as the investment destination of choice for overseas firms, with the US, China and India the top three nations giving this country their vote of confidence.
Nobody would deny that this is not the finest hour for Britain’s economy as a whole and we’d be foolish to ignore the fact that we will be ￡122bn worse off than previously expected. But the only way is up and I’m confident that those who choose to invest now will be rewarded in the long-term. Why? The fact remains that the UK economy is far healthier than many. Put bluntly: we are not Greece.
PWC reported last year that the UK economy has been growing at a relatively strong rate since 2013, with infrastructure spending hitting ￡72bn in 2014. It predicted the UK's share of European infrastructure investment to increase to 23% in 2025, with total spending reaching ￡110bn by 2025.
This country has an excellent reputation for weathering the storm and the announcement that the Government will invest in key areas like construction and infrastructure is a clear sign that we will knuckle down and ride out this latest one.
It’s worth remembering that the tourism industry is notable for not only surviving but thriving in this current economic climate, with inbound and domestic markets recording continued, and in some cases record, growth. The commitment in the Autumn Statement to improved infrastructure and transport links, as well as the freeze on fuel duty, will all add grist to the mill.
Several decades have shown that bricks and mortar have proven to be a safer investment bet than stock market shares in the UK. It’s a long game, but it does reap dividends, particularly when starting from a global economic low point.
To me, investing in the UK economy now is very similar to investing in a new housing development prior to construction. If your purchase before a brick has been laid you will be buying at a much cheaper price than if you wait for the development to be complete, the curtains are hung and the carpet fitted.
The shrewd investor will always strike early and that is why I’m not merely convinced that now is a good time to invest in the UK. I’m convinced that now has never been a better time to invest.