The world is an uncertain place, yet when it comes to the UK it can feel as though we are the basket case of global economies.
Indeed, this week at the Conservative party conference there was a U-turn on the plan to scrap the 45% highest rate of tax – another episode in a growing list of problems that this government faces.
Meanwhile, the housing market has been brought to a near standstill as buyers have been unable to afford new mortgages. This could lead to a housing crisis not seen for decades.
Yet when discussing this with Bruce Stout and the team behind the Murray International trust this week, they reminded me that while things are bad in the UK, it is not much rosier elsewhere.
With war in Europe, the geopolitical landscape was already tense before Italy’s snap general election – brought about by the destruction of the government ran by Mario Draghi – was won by Giorgia Meloni's far-right group Brothers of Italy.
In Latin America, there is similar political instability in Brazil, while turn to Asia and one cannot avoid the economic trouble that China is seemingly in.
Even the US, viewed as a reliable beacon of hope for investors over the past decade, is in trouble. Stout and his team said that markets are underestimating the Federal Reserve’s dogmatic objective to reduce inflation, even at the expense of the economy.
So with all of this turmoil, it was difficult to know how to invest my daughter’s Junior Isa. I set it up days after she was born but had no idea how to invest it.
With my own money it is straightforward. After culling my ISA to pay for a new car and other associated baby costs earlier in the year, I am down to a select three funds that I have high conviction in and have invested in for several years.
These include a bond fund, where my short-term money is kept, an Asia fund, where I have put some cash that will be squirreled away for the long term, and an active global fund, which makes up the bulk of my portfolio
However, when it comes to my daughter’s Junior ISA, I am unsure what to own. Putting cash away for 18 years presents the great opportunity to take risk, which is a completely different mindset to the way I run my own ISA.
Recommendations from advisers suggest leaning towards private equity, or other ultra-high risk strategies, but at uncertain times this is hard to do. As such, for now I have settled on the Vanguard LifeStrategy 100% Equity fund.
Being honest with myself, I am not likely to watch the portfolio as closely as my own and over the long-term managers leave, funds change and portfolios need constant review. It also doesn’t help that the average active manager rarely beats the market over the long term.
This low-cost option has a nice split of assets (unlike a global tracker it is not extortionately weighted to the US) and invests using Vanguard’s passive funds, keeping the fees low.
It might not be the most exciting option, but for times as unpredictable as this, it feels like the right choice. And who knows, I may add some more volatile options in the future.