It’s been a bumpy ride for world stockmarkets this week – and it looks set to remain even more volatile than usual for a while yet. AJ Bell’s Laith Khalaf has been looking at diversification within investment portfolios and the contribution made by a range of ‘safe haven’ alternatives.Laith Khalaf, head of investment analysis at AJ Bell, shares his latest analysis as follows:“The mighty SP 500 has taken a tumble and it’s the actions of the US president which look like the main cause. The US index dipped briefly into correction territory this week, defined as a 10% fall from a previous peak. Markets have taken fright at the global trade war which seems to be erupting, because that can be expected to dampen global growth while pushing up inflation. US stocks already looked vulnerable to correction unless everything turned out peachy, and the market is now looking at US trade policy and thinking peaches may turn out to be quite thin on the ground.“Donald Trump also appears to have spooked the market by failing to rule out a recession at the weekend. This probably isn’t because markets rate his economic forecasting ability, but rather his comments implied a recession was something he was willing to tolerate in pursuit of his wider policy goals

Chancellor Rachel Reeves will deliver her Spring Statement on the 26th of March, faced with a brutal backdrop of rising inflation, anaemic economic growth and the spectre of increased defence costs as Donald Trump pulls US support from the war in Ukraine. AJ Bell looks at what could be on the agenda…While the government had planned to shift to a single ‘Budget’ event each year, there is mounting speculation the Spring Statement could contain significant tax and spend decisions. Reports suggest significant welfare reforms could be unveiled to help make the chancellor’s sums add up, while government departments are braced for painful spending agreementsISA reform has also been placed firmly on the agenda, with Treasury minister Emma Reynolds openly questioning the tax incentives provided for saving in Cash ISAsAJ Bell continues to press policymakers to focus on delivering sustainable, long-term reforms through the simplification of ISAs and embedding stability in the pensions system by committing to a ‘Pensions Tax Lock’. Tom Selby, director of public policy at AJ Bell, comments:“Is it a Spring Forecast? A Spring Statement? Dare we even say it – a mini-Budget? Whatever label the chancellor puts on her set piece announcement on 26 March, the economic picture the Office for Budget Responsibility (OBR) paints is expected to be grim, with fears of stagnation looming and the spectre of rising defence costs as Donald Trump’s US government retreats from Europe further threatening to strain the public purse.“Against such a challenging backdrop, there is a growing expectation that tough fiscal measures are in the offing, with reports that the welfare budget could be significantly squeezed and departmental spending slashed – despite the chancellor’s insistence there would be no return to austerity. Loosening the fiscal rules around borrowing could provide some leeway, although the government has insisted these remain cast-iron and Reeves will doubtless be nervous about the potential kickback from bond markets given what happened to Liz Truss and Kwasi Kwarteng in 2022.“Borrowers and cash investors will be looking for any hint that interest rate expectations might shift upwards when the statement lands. Given the government’s insistence this won’t be a formal Budget, coupled with the commitment not to raise income tax rates, national insurance or VAT, it remains unlikely any game-changing personal tax changes will be on the cards