Managing investments in volatile economy

Managing Investments in a Volatile Environment

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Article written by Richard Cole, Fund Manager from Future Money LTD (4/12/2020)

Keep Perspective

With the Global Financial Crisis, Brexit and Covid-19, as a society we have experienced three “once in a lifetime” events in little more than a decade.  Each of these created mass uncertainty for investors and times of severe stress in financial markets.  The constant coverage of rolling news and a tendency for sensationalism in headlines means a market development can quickly become all-consuming when considering its impact on investment portfolios.   The details of an event must be studied, but it is also important to consider how this fits into, and affects, the global picture and what opportunities might arise on the path ahead.

Moving Markets

2020 will be remembered as the year that coronavirus ravaged the global economy with the heavy falls of February and March being the biggest stories in markets, yet despite this, Brexit is far from a forgotten factor in managing portfolios.  As has been the case since the 2016 referendum, the question of the trading relationship between the UK and EU continues to be a major factor for investors.  On the whole, market participants view a no-deal Brexit as damaging to the UK economy and currency markets are the clearest indication of this.  Sterling fell heavily following the EU referendum in 2016 and has experienced further losses whenever a no-deal departure has seemed more likely, while progress towards a deal has sent the pound higher.

Consider All Factors

The movement of sterling will create winners and losers in markets, and these should be carefully considered, but for investors, this is not the only game in town.  The rollout of Covid-19 vaccines is likely to be the biggest single factor affecting sentiment, while the White House transition from Trump to Biden has the potential to shift trends in both the US and worldwide.  Political machinations and public health developments are at the heart of the current investment market instability.  Predicting the exact outcomes will be extremely difficult and therefore investment portfolios should be carefully monitored, diversified and managed in collaboration with professional financial advice.

Important Information
Please note that the contents are based on the author’s opinion and are not intended as investment advice. This information is aimed at professional advisers and should not be relied upon by any other persons. Any research is for information only, does not constitute financial advice or necessarily reflect the views of the author and is subject to change. It remains the responsibility of the financial adviser to verify the accuracy of the information and assess whether the fund is suitable and appropriate for their customer. Past performance is not a reliable indicator of future performance. The value of investments and the income derived from them can fall as well as rise and investors may get back less than they invested.
Important information about the funds can be found in the Supplementary Information Document and NURS-KII Document which are available on our website or on request.
For any information about the Future Money funds please contact the authorised corporate director, Margetts Fund Management Ltd, on 0121 236 2380, admin@margetts.com or at 1 Sovereign Court, Graham Street, Birmingham B1 3JR.  A copy of their Terms of Business which relates to investments into the funds can also be obtained using these contact details. 

For independent financial advice, please get in touch with one of our financial planning & wealth management team on 0808 144 5575 or email help@armstrongwatson.co.uk.

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The deadline for March’s claims is 14 April 2021, so please submit claims to jrs@armstrongwatson.co.uk.