News / Views

Investment Notes

Follow our regular updates to stay up-to-date with current financial planning and investment issues. We regularly publish press clippings, articles and thinkpieces that we think might be of interest to our clients.

The scale of the impact of the near shutdown of the world economy is becoming clearer by the day.  The immediate hit to economic activity through disruption to supply chains, business closure and social distancing measures is an unfortunately necessary consequence of the virus if we are to protect lives and prevent its rapid spread, overwhelming health facilities.  Governments are,
Stock markets have declined again, as Italy quarantined a quarter of its population to address its worsening coronavirus outbreak, and Saudi Arabia started a price war in the oil market; the Brent crude price has fallen from $65 per barrel at the start of 2020 to $35 at the time of writing.
Stock markets have declined markedly this week, as it became clear the coronavirus (or “Covid-19“) has not been contained within China; outbreaks in Italy and Iran seem to make it more likely the virus could spread around the world.

It has been our long-standing expectation that the UK will vote to stay in the EU at the referendum on Thursday 23 June 2016. This judgement has been based on the belief that the British electorate is internationalist in nature and would respond to the exhortations of political leaders to continue with EU membership.

Both we and markets were surprised by the turn of events concerning Greece over the weekend. Our central assumption had been that an agreement would be cobbled together as deadlines began to bite, and we didn’t expect the Greek government to call a referendum; the subsequent sharp fall in European stock markets shows that other investors had a similar view. The question now is whether the reaction in financial markets is simply the volatility that arises when unexpected events occur, or whether there is a risk of a permanent loss of capital. We are taking an optimistic stance, expecting company share prices to recover; we don’t believe that events in Greece will derail the economic recovery in Europe and the West, for the reasons set out in this note. Meanwhile, we are likely to see more tragic scenes from Athens on the television news, as the crisis impacts everyday life.

Despite the increasing concerns of a Greek default and the additional volatility this has brought to most world markets, we believe that there is more global bloom than gloom; this note explains why current portfolio allocations should be maintained with company shares and commercial property predominating over cash and bonds.

The ECB announces new policy measures to stimulate the economy

In recent weeks the gap in opinion polls between those in favour and those against Scottish independence has narrowed from about 10% to about 5%. With some months of campaigning still to go, the vote on 18 September looks increasingly likely to be close. What are the likely political, economic and market implications of a Yes vote?

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