Hello dear readers; I hope that I find you well this Friday and equally hope that you enjoy this week’s News, Views and Truths.
First off, let me caveat this week’s publication with the fact that I am writing this ex-ante, in that at the time of tippy-tappying on my keyboard, it is in fact Thursday. As such, I am up to my ears in Raab, McVey and Reese-Mogg and, based upon this most fluid of situations, whatever I write may be completely undone by overnight events of many differing facets. However, as one who would never fail to step up to a challenge, I shall continue; just don’t call me out on it!
So, Brexit eh? Bloody hell.
We have a deal, but a deal that seems very divisive – in the UK anyway. The EU seems to be delighted with the outcome, which makes me personally wary that the cards are stacked in their favour. And without much insight into the 585 documents, albeit the headlines aside, I would not even attempt to disseminate the contents for fear of going arse-about-tit. Which is absolutely not like me.
However, what I can comment about are the facts and by “the facts” I mean “the market”, you beautiful mistress.
Sterling, predictably fell by over 1.5% against the US dollar. The FTSE 100 initially rose by 0.50% and then settled lower, with the FTSE All Shares being dragged down marginally by mid cap, domestically influenced companies. European bourses dropped across the board, with the German Dax down 0.25% at one end, and the Irish Overall falling more that 2.5%.
Emerging markets continued their positive return to form, lead by Asia and China in particular. On a valuation basis, emerging markets look like a screaming buy; as long as you can stand the screams of disappointment in the short term and focus solely upon the long.
So what can we take from this? Well as sterling falls, again predictably, large cap UK stocks, predicated on their reliance upon overseas earnings naturally benefit from a weak currency and therefore rise in value. This is compounded further from their relatively cheap valuation and is as good a place as any to hold your investment.
On this particular topic, I held a meeting with David Urch this morning, fund manager at Garraway Capital Management and guest speaker at our more recent client event. Although the scene was and continues to be ever evolving, David reiterated his view of UK equities, again using a positive opportunity backdrop and ultimately sanguine on the potential ‘Hard Brexit’ that potentially looms greater still.
What we both concluded was the opportunity that this situation presents. Be you an investor, advisor or asset manager, understanding your long-term goals and objectives remain key to success. To become affected by the short-term geopolitical noise would result in rash decisions and ultimate failure. Even the possibility of permanent loss of wealth. And we can’t have that can we?
So, the message of the week? What will be, will be. The markets will react and most likely quite sharply over the coming days and weeks. But remember, the best days happen close to the worst days; without the lows you cannot get the highs. So sit back and watch all the drama unfold – just don’t throw the remote at the TV, or anyone else for that matter!
And now onto the playlist; have a great weekend and I shall see you all next week.
