August Investment Report: A broader view of global markets
Welcome to August’s edition of the True Potential Investment Report, where we highlight the key themes shaping markets and what they could mean for investors.
In this update, we review economic and market trends, assess the outlook for key regions, and outline how our portfolios remain positioned in a changing investment landscape.
Key points:
- Strong company earnings continue to support market growth
- Market volatility has been influenced by geopolitical developments
- Bonds are offering attractive income opportunities
- AI investment remains a key driver of economic activity
- A diversified approach helps capture opportunities across global markets
Global economic backdrop
The global economy continues to grow, although the outlook has become less certain due to higher energy prices and ongoing tensions in the Middle East. Economic growth and inflation trends continue to vary across regions, creating a backdrop that is mixed but broadly supportive. Government spending, business investment and continued advances in AI are all helping to support economic growth.
US outlook
The US economy remains in good health, underpinned by strong corporate profits, ongoing investment in AI and supportive government policies. Company earnings have generally exceeded expectations, helping to support equity markets. While inflation and higher energy costs remain areas to watch, the overall outlook remains positive.
European outlook
Europe continues to face challenges from higher energy prices, but there are encouraging signs of improvement. Lower interest rates and increased government spending, particularly in Germany, are helping to support economic activity. While growth remains modest, the outlook appears more balanced and encouraging than it has in recent years.
Equities and valuations
Although many stock markets have reached record highs, strong earnings growth means valuations remain at reasonable levels. Outside the US, several markets continue to trade closer to their long-term averages, creating attractive opportunities for long-term investors. We remain encouraged by earnings growth while maintaining a disciplined and well-diversified investment approach.
Fixed income
Bond markets continue to offer attractive opportunities, with higher yields providing investors with stronger income potential. Government bonds in the UK and US continue to offer value, while selected corporate bonds are providing income levels that compare favourably with recent history.
Potential risks we are monitoring
- AI expectations: Signs of weaker demand or returns from AI investment
- Labour markets: Slower employment growth could weigh on economic activity
- Inflation: Higher energy and input costs could keep inflation elevated for longer than expected
- Credit markets: Stress within private credit markets could contribute to periods of increased volatility
Portfolio positioning
Our investment approach remains balanced across major asset classes. Within equities, we continue to favour selected opportunities outside the US. Within fixed income, higher bond yields are creating attractive opportunities, while carefully selected alternative investments continue to provide an additional source of diversification.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest.
This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.
Opinions, interpretations and conclusions represent the views of True Potential Investments at the date of publication and are subject to change. Forecasts are not a reliable indicator of future results.
All data sourced from Bloomberg L.P. (03/09/2026)
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN 527444. Registered in England and Wales as a Limited Liability Partnership No. OC356027.
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