Watch out for next week's Budget

In last week's cover story we asked a pretty simple question: "Is the bear back?" On the evidence of the seven days since, the answer is a clear "yes." The Japanese market (a long-term MoneyWeek favourite) is down around 9% this month alone, Europe has slipped by a similar amount and the S&P 500 has lost 6.5%. It is now pretty much back where it was at the beginning of the year.

But if you think developed markets are looking a little iffy, you haven't been paying attention to emerging markets investors in many of them would absolutely love to just be knocking around January's levels.

But they aren't. The main markets are all down 6-10% in the last month. The MSCI Emerging Markets index has fallen a horrible 18% since the turn of the year and is close to an 18-month low; the Shanghai Composite index has lost a fifth. Nasty.

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John wrote about the core driver behind all this last week (rising bond yields) and suggested a few ways for you to bear-proof your portfolios (although I suspect most readers did this some time ago). However, I wanted to add my voice to his on the matter of gold. It appeared to have briefly forgotten its role as a hedge against everything (inflation, deflation, war, etc), but now it seems to be getting something of a grip.

The price of physical gold has bounced from its summer lows over the last few weeks and gold mining shares have been top of the few risers in the FTSE 100 in October. John and I both hold gold and we think you should protect yourself by holding some too.

On the matter of protecting yourself you should also be keeping an eye on next week's Budget. We'll be covering it in full here of course, but as we pointed out last week, while the UK's public spending is more under control than it has been for some time, that isn't saying much at all.

Philip Hammond is still coming up short so there is every chance he'll want you to help him out.

This could mean all sorts of things: a rise in the capital gains tax rate (it's too low relative to income tax); an income tax rise or a shift in rate thresholds; or a change in the annual allowance for your pension savings.

Huge changes are unlikely there is enough uncertainty about already and right now is certainly not the time to send too many unfriendly messages to the well off.

But why take unnecessary risks? If you still have gains in, say, expensive growth stocks, and an allowance to set against them, why not take those gains and roll them into, say, a more value-orientated investment inside your pension or Isa before one of the things that makes that possible changes.