Our cautious approach is helping to preserve values in these uncertain times.
This week the Federal Reserve cut interest rates for the third time this year, in an attempt to head off a slowing U.S. economy. This matters because global markets tend to follow what’s going on in America.
On the face of it America appears to be doing well, but underneath the bonnet their economy is slowing, and the main culprit seems to be US / China trade tensions.
Their stock market is back up to its all-time high, however this is pretty much where it was in July, and more or less where it was this time last year. So things have stalled a bit.
Whilst markets have priced in an interim ‘trade truce’ by Christmas, this is not certain, and so we expect this choppiness to continue, where one minute it’s on, and the next it’s off.
In the UK, this also feels a bit like Groundhog Day, with Brexit postponed and a general election on the 12th December. The bottom line is that the situation has just become far more uncertain, with at least four different Brexit policies on offer, from four political parties.
It’s said to never discuss politics, religion or sex in polite company, however I thought the following view from Bloomberg summed it up quite well, … whilst the Conservatives are ahead in the polls, and have a higher probability of victory, it is nowhere near a certainty. If there was to be a form of other coalition, this would likely bring another referendum, offering a choice between a soft Brexit or remaining.
So it really is anyone’s guess and no gambles should be taken on trying to predict what may happen, which is why we are to retain our cautious stance for now, and remain ready to adapt to what the country decides.
Austyn Smith is a leading advocate of the ‘risk managed’ approach and ‘all weather’ investing, and has been featured as a Citywire ‘Cover Star’ in 2010, 2013 and 2017.
Following his work on risk reduction strategies, in 2011 he was recognized by Citywire Wealth Manager magazine as ‘Being in a position of some influence among your peer group, and likely to take a leading role in setting the investment agenda for UK Private Client managers.’
Austyn has recently contributed to leading publications by Citywire, and the Institute of Directors, and over the years has been quoted in the Sunday Times, Mail on Sunday, The Independent, and Bloomberg Markets.
With over 25 years wealth management experience, Austyn lives with his wife and children, Black Labrador and Springer, in Beaconsfield, Bucks.