We issued an article earlier this week prior to the UK’s referendum vote. The result is now known and with all markets reacting, we want to emphasise the points that we made in our earlier article.
Nothing that we said in our earlier article has changed this morning.
The market risks may seem material, but they are mitigated by the ownership of robustly structured, well-diversified portfolios.
The key is to stay calm in the face of market uncertainty. ‘This too shall pass’ as the investment sage John Bogle has said many times before at other seemingly concerning times.
At times like this, it is easy to become overly concerned about near-term events, such as the outcome of this referendum.
Your life as an investor will inevitably be punctuated by an ongoing series of near-term events, making life continually uncomfortable, unless you view them in context. Below we reiterate a few thoughts that might be helpful.
- The value of your portfolio simply tells you how much money you would have if you liquidated your portfolio today, which you have no intention of doing. You only make actual losses if you sell assets. If you don’t sell them, they remain in your portfolio to deliver future returns.
- Your portfolio has a well-thought-out structure – as we explored previously and as outlined below – that has been designed to provide you with the best chance of a favourable long-term investment experience. Stick with it if your financial objectives have not changed.
- Some assets will be doing well at times and others less so. No-one knows which asset(s) it will be at any point in time. Markets work well enough to make jumping from one asset class to another a dangerous gambling strategy.
- Your adviser cannot control what markets do, nor can fund managers. Markets will do what they do.
Try not to worry too much about the consequences on your portfolio as you are well-positioned to weather any storms.
For further detail about the portfolio structure please read our article in full here.
You may also be interested in reading Bank of England Governor Mark Carney’s statement issued this morning which can be found here.
Please do contact us if you have any specific questions which relate to your own circumstances.
This article is for general information only, and is not intended to be advice to any specific person. No reader should take any action based on the content of the publication without first obtaining personal advice from us or their own financial advisers.
The value of investments and any income taken from them can go down as well as up. Exchange rates may cause the value of underlying investments to fall as well as rise. You may not get back the value of your original investment.
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