Our Investment Management Team React To Recent Market Movements
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
The last 48 hours have seen market corrections partly handing back the strong gains made since the turn of the year. Whilst naturally unsettling it is important to remember that these movements are a natural feature of the financial landscape and are not something we are unprepared for.
We are working closely with our global partners to manage our portfolios as events unfold and are well placed to take advantage of the opportunities that events like these present.
The question clients may ask is ‘why has this happened now?’ Paradoxically the trigger for the heightened volatility was good news in the shape of higher than expected increase in wages paid to workers in the US and also here in the UK. This prompted speculation that interest rates may go up sooner than was expected which affected sentiment not fundamentals. The global economy remains strong with sustained growth, corporate profitability remains robust and personal prosperity with consumer confidence remains high confounding what many in the media would have us believe.
We have been positioning our portfolios towards more defensive assets and have been building up cash weightings. The beauty of our multi asset approach is that we are not slavishly tied to the fortunes of global equity markets but can seek out undervalued alternative assets to help mitigate the effects of stock market turbulence.
Passive index trackers, higher cost managers and those who have been relying on taking higher risks to generate returns will be feeling particularly uncomfortable. However our philosophy of Advanced Diversification and our mantra of reducing costs, managing risk and optimising risk adjusted returns will stand us in good stead in the days ahead.
We remain committed to our Advanced Diversification multi asset approach and will monitor and assess the markets over the next few days. Our inclination is to take advantage of the opportunity presented to buy quality assets in global markets, putting cash to work while remaining agile in moving between asset classes.