In writing this latest update I’ve scanned through previous updates. Most of the previous comments of the past year or so remain unchanged;
Brexit is slowly moving closer to a conclusion. Although you would be forgiven for thinking the financial world and economy is on a cliff edge given the media coverage, the outlook isn’t as bleak as we’re led to believe.
The global economy has an equal impact, as does our domestic economy, in financial markets. Furthermore, much of the Domestic UK market isn’t contingent upon the Brexit terms negotiated with the EU.
That doesn’t mean there won’t be any changes, however people will continue to buy bread and go to work. Long term I am confident that clients will see their investment portfolios ride out any turmoil caused by Brexit.
Other risks which we are mindful of, and watching for, include interest rates and political risks.
Interest rate risk could be problematic if there is a sharp severe rise. However, we feel this risk is fairly minimal as we do not envisage any dramatic rate changes, rather a slow, steady and modest increase in rates over time.
Political risks will likely remain for the next few years as markets generally favour stable, centre-left or centre-right politics, whereas current UK political leadership seems much more polarized. Over time I would again expect this risk to stabilize but we are watching for changes constantly.
In terms of more immediate risks and the reasons behind market turmoil these can largely be attributed to the ongoing ‘trade war’ between the US and China. Also, Italy disagrees and is negotiating with the EU regarding its debt policies.
We have already taken actions to help mitigate the above risks for our clients and will continue to monitor the situation. By having a diversified portfolio across various assets classes, geographical regions and companies allows our clients to remain long term investors and ride out the current turmoil.
Contact us should you have any queries or worries. Our team are always happy to have a chat. Whether it is a review driven by concerns in financial markets, a change in legislation or simply an alteration in your situation or priorities, please contact us.