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Do you feel richer?

Daniel Lane

Daniel Lane - Fidelity Personal Investing

Employment data released today from the Office for National Statistics (ONS) shows more of us are in work than at any time since 1971. What’s more, with earnings growth of 3.9% excluding bonuses, the highest rate for 11 years, UK households might just feel a bit better off at the moment.

London commuters

The ONS points to more women joining the working world as a main driver for the growth. That, along with wages outstripping inflation, mean we’re objectively richer but does it really feel like it?

Another ONS report shows it isn’t quite working out that way. The organisation’s personal and economic well-being study gives us a guide to how the nation is feeling about the economy, and the most recent one shows people’s expectations for the near term are rather bleak. While all economic well-being measures improved in the first quarter of the year, followed by today’s findings, the perceived direction among us for the next few quarters is a steadily negative one.

And while this all might be very subjective, with heavy influence from the UK’s impending departure from the EU, it may well be more reasonable to stem any joy over higher wages and employment.

Last week’s news that the UK economy contracted during the second quarter of the year has prompted fears of a recession. And while it will take a few more readings to see if we are actually close to that territory, there is still an increasingly likely interest rate cut to deal with later this year - good for borrowers, not for savers.

So are we richer or not? Well objectively we are but the point is that we just don’t see it lasting for too long. There are so many economic and political variables coming down the line that we can’t feel better off with any degree of certainty.

And the same is happening with markets. The volatility of the past few weeks has shown us just how quickly things can drop and spring back on the back of a presidential announcement. There are any number of things that could influence market movements for the rest of the year, but just like our view of the economy, we just don’t know what’s around the corner.

That’s why it’s so important to have a portfolio ready to deal with whatever happens. When a surprise event or tweet pops up it’s already too late to position your investments to benefit, it’s all about having it diversified from the get go.

We often talk about holding a range of funds with assets that behave differently from each other - the difficulty can be in actually choosing a selection to suit you, and feeling confident that you’ve done the right thing.

Funds like the Fidelity Select 50 Balanced Fund take the guesswork out of it all. Manager Ayesha Akbar populates the portfolio with funds our analysts rate highly, and looks to get a blend that aims for growth, with an eye on preserving capital as well. She pays attention to making sure assets are uncorrelated, and can pass the baton between themselves so parts of the portfolio are performing at any one time.

Hear from Ayesha Akbar in the video below.

More on the Fidelity Select 50 Balanced Fund

Important information The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Select 50 is not a personal recommendation to buy or sell a fund. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

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