Brexit UpdateJuly 7, 2016 10:01 am
Brexit Update – as your financial advisers we have spent the past three working days being bombarded by more and more analysis from ‘experts’ who clearly weren’t telling anyone what they knew (we doubt they knew more than anyone else actually). Having sifted through a considerable amount of this data we have completed an initial review of our portfolios now that the vote has seen the ‘leave’ campaign succeeding.
Whilst the early reaction from many quarters suggests that more political bickering is likely with the Prime Minister resigning and the pressure on Jeremy Corbyn to step down, there is currently little planning in terms of how the ‘leave’ team will be looking to manage this transition. With a political vacuum at Westminster and the journey to the EU exit door only just beginning we are more interested in the facts that we can understand on behalf of our clients, rather than the rumour that we can’t.
As there is so much of our future that is yet to be articulated we feel reassured that within our portfolios the underlying fund managers had already assessed their positions prior to the vote taking place. Where they felt it was appropriate they had either placed hedging transactions or adjusted their portfolios to match their views on the economic situation. The way we construct the portfolios allows us to access a range of manager views and investment styles. As each manager has a different view (depending on what their fund is designed to invest in) this can be a significant advantage to our portfolios: diversification in the form of the underlying assets.
Of course, we are not suggesting that a new bull market in financial assets is about to begin, however there will always be opportunities for those with the patience to sit through a period of turmoil. The diversification in our portfolios will, we hope, offer our clients some stability in values whilst this process is being worked through. In the near term we would urge clients to understand that markets often know little more than anyone else and they can often give investors a signal to sell at the wrong time.
We can’t guarantee protection of investor capital but we believe that our portfolio managers have cash in their funds which can be put to good use whilst markets are volatile. This is often when the best future returns are made for you. To echo the sentiment of a famous investor (Warren Buffett) an investor should be ‘fearful when others are greedy’ and ‘greedy when others are fearful’.
At this stage, therefore, we will be maintaining our current portfolio asset allocations and keeping them under regular review as the landscape changes in the coming weeks. We do recognise that each client will have different requirements now and into the future, so should you need to review your own circumstance please do contact us and we will be happy to review and make adjustments where appropriate.
Clayden Financial would like to thank you for your ongoing support at this challenging time.
Best wishes for now, we will keep you updated as events unfold.