Goodness there’s a lot of noise about at the moment! And I don’t mean the storm raging in the skies above me as I write this, nor the thunderous roar of the crowd as England left the Euros last week in a rather ‘disappointing’ game against Iceland!
I, as a Financial Planner, of course mean the ‘noise’ following the results of the EU Referendum last Friday morning. No doubt that day, 24th June 2016, will be in the minds of the UK, Europe and the World for some time to come.
Whether you were Bremainer or a Brexiter, one thing is for certain, there is a lot of uncertainty, a large degree of political unrest, and lots of people, making lots of noise, both at home in our country, and in the neighbouring Eurozone.
The markets over the last week have been interesting to watch, as have the headlines associated with them. Wednesday 8th June the FTSE-100 was 6,301, Tuesday 14th June saw the FTSE-100 at a level of 5,923, following which it saw steady climb as the Remain campaign seemed to be gathering momentum. Over the next 9 days until it closed on the evening of 23rd June, the market climbed to 6,334, an increase of 6.95% in 7 working days. The morning of the 24th the market fell in the immediate opening session to 5,850, but by the end of the day had rallied to 6,138, now at 6,370 (midday on Thursday 30th June).
However, if you had read the headlines of the papers, with varying degrees of content, you could be forgiven for thinking that we were propelling ourselves off the edge of the market cliff face and heading for very deep waters.
True, some assets and stocks have been hit very hard, primarily concerned with the outcome of the invocation of Article 50. On the reverse, some assets and stocks have shown resilience and some assets and stocks have shot forward.
It goes without saying that if you have a narrow portfolio invested in a small number of stocks or asset classes, whether your portfolio is £1,000, £100,000, £1m or more, you are more likely to be subjected to far greater volatility, especially in times like these. If you happen to be in the resilient and growing stocks then you’re in a happy place, if you are at the other end, then perhaps less so.
We have always been, and remain, great advocates of Multi-Asset investing. This means investing across a wide and diversified range of assets, and doing so in a manner where professional fund managers make decisions in line with the risk mandate of a given portfolio. The simple rationale for this being that for longer term investment, this provides a large degree of the upside of the markets, with a lower degree of volatility than the markets themselves. A little bit like having your cake and eating it, only when you are looking after other people’s money it’s really, really important that you do it well.
Thankfully that’s what we do best. Looking after our client’s monies through long term financial planning, and doing so in a way that our clients not only understand exactly what is happening, they can see it in front of their eyes, and, no word of a lie, they even come to enjoy it! What better job could you want – to see someone’s dreams come true, having looked after and advised them for years!
So, we say, Keep Calm and Carry on Planning. Engage with your professional advisers, this is when you need them most, and by working with them we hope that you are able to navigate the ‘sea of noise’ and make the decisions that are right for the financial future of yourselves and your families.
Have a great summer!
Carrie
