Why cash isn't king

Another strong month for US equity markets, with the S&P 500 finishing the month at a new high and up 18.3 per cent since 1 January. The main driver of the US market seems to be robust economic growth and the prospect of tax cuts. Japan also continued its upward path, with the Nikkei 225 up 3.2 per cent in November and 18.9 per cent in the year to date. Signs that the Bank of Japan’s quest to get inflation to 2.0 per cent might at last be working pushed the index to its highest level since the early 1990s. While the US and Far East markets were enjoying the bull run, the UK and other European equity markets struggled. The German Dax was off 1.6 per cent and the FTSE All-Share (Total Return) Index gave up 1.7 per cent and at 30 November was up just 7.9 per cent in 2017. Uncertainty about Brexit negotiations and their impact on the UK economy seemed to be unsettling markets.

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