Market Commentary 1 April - 30 June 2022
Financial markets have experienced a volatile first half of the year. Inflation, which has risen to its highest level in 30 years, has been one of the key causes of the volatility. Elevated inflation levels have forced central banks to quickly increase interest rates to try to bring inflation back down towards their long-term targets. Raising interest rates encourages people to save and slow business investments, however it also likely results in slower economic growth.
This has created uncertainty for investors, and financial markets generally don’t like uncertainty. While times like these can be unnerving for investors, it does happen from time to time. It is important for investors to stay focused on their long-term financial goals, and not get spooked by the short-term volatility.