“The UK market is also likely to gain from inflation and incoming interest rate rises,” he said. “This is because there are a lot of commodity, energy and bank stocks.”
Banks’ profit margins typically improve when interest rates rise, because they can charge more on their loan products.
Mr Maguire added that investing some money in bonds and cash – such as through the Fidelity Strategic Bond fund and the L&G Cash Trust – could help cushion blows to your portfolio during volatile periods in the stock market.
Picking high-growth investments
Once you have built a solid foundation using tracker funds, there is a huge range of other exciting, fast-growing investments to add on top. These are usually riskier, so they should make up a smaller proportion of your portfolio.
James Barton, of the wealth manager Featherstone Partners, highlighted Chrysalis Investments for investors comfortable taking on more risk.
“This trust invests in private companies and takes them to their flotation on stock markets. Some of their most successful early-stage investments include Klarna…
