Only a year ago, our April 2016 market update was looking ahead at the referendum. Now Brexit is officially underway.
From a financial aspect, probably the greatest surprise for all pundits and financial managers is how consistent and bullish markets have been over the past 12 months.
On the build up to last year’s referendum, markets dipped, but since then there has been positive growth.
Earlier in the year, the US election looked to derail the growth, but once again pundits were caught out.
The market correction has failed to materialize, and the main indices have had 3 months of what is near record levels of low volatility whilst also surpassing previous market highs.
Where now is the key question?
As a result of the low volatility and a reasonable level of encouraging data, there is an air of optimism, despite the upcoming negotiations with Europe.
From an asset allocation basis, property continues to offer steady, if unspectacular, returns.
Fixed interest, such as gilts and corporate bonds, remain muted and are less favoured despite being an almost essential constituent of everyone’s portfolios. Equally absolute return funds, continue to offer the hedge or potential cushion if markets do take a surprising turn.
Equities remain the focus of most investment portfolios.
On a global view the US is still offering great opportunities as their economy looks to be moving into a growth phase. Other global markets are similar.
Regarding the UK and Europe there is an understandable wariness. Within both regions, it is important to focus on actively managed funds who make their investment choices based upon fundamentals rather than simply following the herd.
This type of value investing is something we agree with and has been a constant theme in helping us manage our clients’ portfolios.
Overall, we are positive and thing the long-term view is encouraging. For our clients, we are also keeping an eye on the short-term and will continue to adjust portfolios and investments accordingly.
As always, do not hesitate to get in touch with Platinum, and our team, if you would like to discuss your investment strategy or if you have any concerns.