As dawn breaks, the morning light reveals yet another political gamble that has not paid off.  The UK has a hung Parliament, with no party holding an absolute majority.  Such is the unpredictability of a parliamentary democracy.  If you ask the people of the UK what they think, be prepared for the answers that you receive!

The last few weeks has highlighted the divide in opinion in the country of the role and size of the state in our lives, with further austerity and a shrinking state on the one hand, and a material rise in spending (and taxation for some) on the other.  Each of us has been able to express at the ballot box yesterday our thoughts on which vision is best for us and the nation.

With the start of the Brexit negotiations just days away  it is an awkward time for such political turmoil.  However, we will leave the ramifications of this result and the speculation of what we might expect next to others.  We don’t want to add to the noise or a further sense of election analysis fatigue.

Strong and stable portfolios (if not government)

What we do want to do is to reassure you that your portfolio is well positioned to weather any storms both now and in the future.  It is worth remembering the following:

• Your portfolio is highly diversified through the thousands of equities and bonds that it holds and the countries that it is invested in.
• Your non-UK equities are unhedged, which means that you hold this portion of your portfolio in non-GBP currencies. In the event of a fall in the value of Sterling (GBP), as we have initially seen, these overseas assets will be worth more in Sterling terms.
• Your bond holdings – which are hedged – are diversified across global markets, reducing the impact of any rise in the cost of borrowing that might occur on account of the greater uncertainty that the UK faces at this time.
• While markets don’t like uncertainty, the UK is a small player in the global pond and this morning’s result is just a ripple.
• Portfolios go up and down; they always have and they always will. If you don’t need to spend the money today, don’t worry about what happens in the coming days, weeks and months.

Although this morning’s result may feel uncomfortable, let’s keep it in proportion; we live in a tolerant, open society – and by the look of the greater level of engagement in the election by the younger generation – a great democracy that cares passionately about its future.  So, as we step forward into a slightly uncertain future, you can rest assured we will be here to look after you and walk this journey with you.

If you would like to speak with us about this or any other matter, please feel free to give us a call today.

Investments involve risks. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Past performance is not a guarantee of future results. There is no guarantee strategies will be successful. The information in this material is provided for background information only.  It does not constitute investment advice, recommendation or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision.