For a Budget that appeared to receive a thumbs-up from most quarters, the reaction from the stockmarket seemed overly perverse.
The huge shake-up to the pensions industry may not suit all providers but it promises to make pension provision more attractive and encourage long-term savings. That in turn should result in money flowing into financial assets.
Yet shares trended off in the immediate aftermath of the chancellor’s statement with 6,500 broken on the downside the following day, even if a later recovery resulted in this hurdle being regained.
Most people I have spoken to since the Budget view the changes as positive. While life companies and annuity providers all took a tumble in the wake of the announcement, wealth managers attracted some interest in the belief that the market for managed individual pension pots should receive a boost.
In the end, I am not sure that the changes will be quite as wide-ranging as many believe. There is always likely to be a strong underlying demand for a guaranteed income in retirement and that is probably best provided through the annuity route.
But the easing of the tax burden on pensions and the simplification and enhancement of Isas must add impetus to the savings market. If you were fortunate enough to save into Personal Equity Plans and the Isa replacement from the very beginning, you could have a significant sum in your portfolio.
The higher limit will allow a husband and wife to squirrel away £30,000 each year, while dropping the 55 per cent tax rate could encourage those who considered pensions too inflexible to re-engage.
It was not enough to shake our market out of its torpor, however. Perhaps it is the belief that interest rates could rise before the end of the year that is holding buyers back.
My money remains on a post-general election rise but if it comes sooner, it is likely to be because the recovery is building, which would be a positive development. Once Government interference is taken out of the equation, perhaps we can return to more normal markets.
Of course, the situation in Ukraine and Crimea is hardly adding to investors’ store of happiness but it remains difficult to gauge how much of an influence this may turn out to be on our economic wellbeing. As I write, there appears to be a reluctance to escalate the sanctions to involve commercial interests although this is likely to be inevitable if the Russian land grab continues. All very worrying – and hard to assess in market terms.
Whether these geopolitical concerns are behind the stalling of the US market is less clear. While the S&P 500 Index remains in positive territory for the year as a whole, it is only by a whisker and could have been lost by now.
The end of the first quarter of 2014 is imminent and it is looking as though no progress will be made in either equity or fixed-income markets. Yet news on the economic front has been steadily improving. Such is the perverse nature of the investment world.
So we approach the second quarter of the current year with no discernible trend being established and investors generally sitting on their hands. Such a background continues to favour the stockpicker, while my technical analyst colleague clearly believes the Russians are helping his prediction come true.
Whatever the outcome, this does not yet feel like a situation in which to take a bold gamble. Let us hope that as the days lengthen, the clouds gathered around the edge of the market disperse.
Brian Tora is an associate with investment managers JM Finn & Co