THIS year started with overwhelming negativity about European assets, as political fears gripped the markets.

Investors were concerned that populist victories in a number of key European elections could have severe repercussions for the euro currency, European economies and stock markets.

However, the overwhelming negativity has gradually turned as populism’s electoral defeats give heart to investors.

Emmanuel Macron’s victory in the French presidential election was greeted as a reassuring result for the establishment over the rising populist wave.

Following on from the failure of Geert Wilders’ Freedom Party in the Netherlands, there is talk of populism being on the wane.

Investors had feared that if the populist candidates had won, they would have implemented economic policies that were economically destructive.

France was a prime example.

Restrictive labour laws have been a factor discouraging firms from manufacturing in France.

During the election campaign, the establishment parties, including Macron’s En Marche! ‘movement’, recognised to varying degrees that jobs will be created by making jobs less secure.

The populist response from Marine Le Pen’s Front National tended towards some form of economic isolationism.

Despite the fight back by the establishment, there are still challenges ahead.

To press his agenda in France, Macron will now look to the parliamentary elections, which take place in June.

It looks likely that he will fall short of an overall majority.

But, as a centrist and a reformer, Macron is well placed to draw votes from the centre right or centre left.

This gives him a decent chance of getting his agenda through, though we will have to wait for the elections to be sure.

There is also a general election in Italy to look forward to next year. However, political concerns have lessened.

European stock markets tend to perform well during periods of recovering economic growth and, although we are more cautious than most on the growth outlook, we remain positive on the region.

Despite record low interest rates and rising inflation many Britons are relying on cash for their future.

Cash remains the preference for about 80 per cent of those who saved money into individual savings accounts (ISAs) in the 2015-2016 tax year.

According to HM Revenue & Customs, nearly £80bn was subscribed to ISA accounts in that tax year, but stocks and shares ISAs only accounted for £21bn of the total.

It can be tempting in times of uncertainty to keep your savings in cash as a way of sheltering your money from risk.

Many people perceive cash to be risk-free and only feel comfortable investing in stocks and shares when the outlook feels relatively certain.

What this approach ignores is the pernicious impact of inflation. Share price performance or interest rates are harder to disregard, having a far more visible effect on your money.

You will not see the effects of inflation, which slowly and imperceptibly erodes the value of your money, published on your bank statement.

However, with interest rates stuck at record lows and inflation at 2.3 per cent, most of the money stashed away in cash savings accounts is at risk of having its real value eroded by rising prices.

As inflation is forecast to rise even higher this year, it is crucial to invest in a way that protects your cash against it.

There are numerous ways of doing this but none has been as consistently effective as investing in stocks and shares.

Investing in equities is not suitable for everyone. It depends on your individual tolerance for risk and investing timescale.

Generally speaking investing in equities should be viewed as a five-year commitment at the very least.

Over the short-term share prices can swing rapidly up and down.

But if you invest in a diversified portfolio over the longer-term these movements should smooth over time.

The longer you leave your money in the stock market, the more likely it is that you will emerge with real profits.

Neil McLoram, above, works in business development at wealth management firm Brewin Dolphin, based in Newcastle.

The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin. No director, representative or employee of Brewin Dolphin accepts liability for any direct or consequential loss arising from the use of this document or its contents. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation, which is subject to change. The information contained in the Brewin Dolphin Family Wealth Report is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The value of investments can fall and you may get back less than you invested. The information is for illustrative purposes only and is not intended as investment advice.