Market Reports

Market Summary | October 2016

25th November 2016

The Author: David Cooper

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Financial strategist, investment adviser and Sales Director for United Advisers

The world certainly looks very different now than it did a few months ago.

In the US, Donald Trump is now President Elect, while in the UK the validity of Teresa May being able to trigger Article 50 to initiate Brexit proper has been called into question.

Elsewhere in Europe, with the Italian referendum set for December 4th, and the French general election in 2017, the stage is set for a Euro-landscape with considerable change yet to come.

Changes to the geopolitical landscape often result in changes to financial markets. The recent Brexit and Trump votes both demonstrate desires for change. These changes are are likely to represent geopolitical disturbance for some time in the future with inevitable effects on the financial Market.

Currently Sterling is at a 30 year low. While there was slight upturn with the news that Article 50 may not be invoked without parliamentary approval, the value remains far from pre-Brexit levels:

Market report november graph drop sterling

This has left many expats wondering how Brexit will impact savings held in the UK; an issue we discussed here.

Whilst the falling value of Sterling may have negatively impacted many expats and UK holiday makers this summer. But, as with all change, the low rate has also had positive impact. It has helped to improve valuations for FTSE 100 companies, boosting exports, and fostering continued good manufacturing performance.

All eyes are currently on inflation. This has resulted in a substantial fall in Gilt prices in October, and is detrimental to bonds, initial overall market reaction has not been as impactful as expected and volatile conditions are already starting to unwind.

Our work with PSC, and our philosophy, is about constantly monitoring trends in the market and building well-balanced portfolios. We take into account any factors we jointly feel may impact our investment portfolios and make appropriate changes when needed.

Following the recent ‘Post-Brexit vote’ we restructured a number of our accounts.  Our portfolios which feature more prolific multi-asset and multi-manager funds, to focus more on medium to long-term horizons. We are confident that our approach ensures we are currently well adapted to minimize the effects of short-term market volatility.

At United Advisers, we work closely with our multi-award winning investment research partners, Purple Strategic Capital (PSC).

As part of our service, we offer a summary of our current market commentary; you can download the full report here: Full Market Review | October 2016 (291 downloads) . The full report includes commentary about Asia Pacific and Emerging Markets.

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