"When things get murky, savvy investors are known to act rationally. And right now, as the UK economy struggles with weak growth, sticky inflation, and political noise, London's investors are quietly moving their money into places that make more sense. They're not chasing the latest fad or crypto craze. They're returning to something simpler: protection, patience, and prudence. That means gold, commodities, and other alternative assets that hold value when everything else shakes."
"Most people in finance like to pretend they're long-term thinkers. In truth, they're optimists with short memories. The 60/40 portfolio worked for decades until it didn't. Bonds don't protect you when inflation bites and government debt piles up. And when earnings fall or consumer spending slows, stocks don't save you either. You get hit from both sides. That's where we are now."
"According to the ONS, in late 2024, the UK's current-account deficit widened to £18.7 billion (2.6% of GDP). Growth forecasts remain flat. Though lower than the 2022 peaks, inflation is still above the Bank of England's target. In plain terms, your pound buys less, your bonds yield little, and your equities are volatile. So London investors are asking a reasonable question: "What else can I own that doesn't fall apart when markets do?""
"The first rule of survival in this financial climate is to avoid correlation. If all your assets move the same way when trouble hits, you have a ticking bomb. That's why investors are weighing alternatives. Commodities, infrastructure, private credit, and especially gold behave differently from traditional financial assets. When stocks tumble and currencies shift, these assets tend to hold or even rise in value."
UK investors are reallocating capital toward gold, commodities, and alternative assets to seek protection amid weak growth, persistent inflation, and political noise. Traditional 60/40 portfolios are failing because bonds weaken during inflation and stocks fall when earnings and consumer spending slow, leaving portfolios exposed on both fronts. The UK's current-account deficit widened to £18.7 billion in late 2024, growth forecasts are flat, and inflation remains above the Bank of England's target. In response, investors prioritize assets that avoid correlation with equities and bonds, such as commodities, infrastructure, private credit, and gold, which tend to hold or rise when stocks and currencies tumble.
Read at London Business News | Londonlovesbusiness.com
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