I think that the idea of a ‘hung parliament’ was a distant and unlikely nightmare for many of us just two weeks ago.
Much has changed in the political landscape of our country since then, with some clear messages of discontent around austerity, immigration and security coming to light. The result appears to be a paper thin majority for the Conservatives who will have to form a government based on some concessions to other parties – hardly the starting position a ‘Brexit Negotiator’ seeks.
But how will all of this affect our client portfolios and how long is ‘uncertainty’ likely to be a certainty?
I have cared for my clients for nearly 20 years, starting out as a bank adviser at the age of 24. During this time I have seen the Russian Oil Crisis, Dot-com Bubble, Twin Towers, Credit Crunch, Great Financial Crisis, Euro Crisis, Brexit and much more. One thing remains constant – portfolios of Equities, Bonds and Property have made pleasing gains far over and above that of cash over the longer term.
At the point of writing, the FTSE 100 is actually up which is a slight surprise in the early stages – although the FTSE 250 is suffering.
We thought the FTSE 100 may well continue its rise once the dust had settled because of a likely weakening of the pound – and I mentioned this as a potential outcome to our ‘Proactive’ clients only two weeks ago. UK smaller companies will struggle more for a while, but the recovery (when it comes) could be significant.
I envisage a period of uncertainty and UK stock market wobbles throughout the rest of 2017. However, all of our client portfolios are diversified to include large amounts of ‘other’ asset classes or countries away from the UK. I experienced a few questions from some of my clients recently as they pointed out that the UK FTSE 100 had started beating our lower level 1-3 portfolios for the first time in many years.
My answer then was the same as it is now – we diversify your holdings which will slightly dilute returns when one market rises fast – but the journey should be more comfortable when that same one market falls back.
We can’t be certain of avoiding all of the volatility that will doubtless abound in the coming months, but we are on the case as ever and I am 100% confident that our clients will be best placed to cope with these uncertain times.
As always, Katy, Lisa and I are here for you unreservedly. If you have any questions or concerns, please let us know. We will keep working tirelessly to keep you informed and looked after. We have some exciting news on our own Thomas and Thomas team expansion to follow….but we will save that for a slightly calmer news day!
My very best wishes as ever