NEWS, VIEWS & TRUTHS (27TH AUG – 30TH AUG)

Doesn’t time fly.  Summer seems a distant memory as the leaves are turning from verdant green and the temperature drops.  But at least we can all start planning for Christmas! Or is that just Mrs Alexander? Anyway, welcome to this week’s News, Views and Truths.

This week has been frantic.  Good frantic, but frantic. A huge positive has been the opportunity to sit and talk with a number of long-standing clients and every single one had the same topic to discuss.

Brexit.  Or “bloody Brexit”.  Are they different? I’m starting to think not.

Now I have a rule and that is not to talk about politics or religion.  Those who know me understand that I have my views on the world and I’m more than happy to discuss these with anyone.  But this blog is not the vehicle for this.

However, with the carry on in Westminster, this week has piqued consternation in the clients that I have spoken to.  Assuming this may be the case for a number of clients (and I suspect that this may well be that case because, well, its all doom and gloom out there in TV land), I thought I’d bring a bit of rationalisation back to the situation.

First off, I am in no way going to cover the constitutional rights or wrongs of the prorogation of parliament.  That is well above my pay grade.

What is in my sphere of influence is the effect, if any, all of this is having on the market.

And that, ladies and gentlemen, is very little.

Approximately 35% of your Three Counties portfolio exposure will be within the UK and that is equally diversified between equities and fixed income, both sovereign bonds and corporate credit.  Add to that the 5-10% Eurozone equity allocation, the majority of your portfolio is ambivalent to Brexit.

Moving on and as mentioned many, many, many times, the market abhors uncertainty.  What this week may be possibly indicating is more clarity of result; again, I have no intention of getting any further into that particular rabbit hole.  That could be reflected by the possible “bottoming out” of recent Sterling falls against both the Dollar and the Euro.  

And because of this, August has not been kind to UK equities. However, not all UK allocations are the same.

We recently made a change to client’s portfolios, with the rather contrarian recommendation to include 30-year UK gilts across all our client’s portfolios.  The reason being was that, in our view and despite the historically low yields on offer by the asset, this could have further to fall, especially if you consider negative yields offered throughout the Eurozone and other developed markets.  

Can you remember that letter?  This is what has happened since…

You are the blue line.  The FTSE All Share is the green line.  That’s 1 month. And I’m absolutely certain that this particularly fantastic news for UK investors has not had any coverage on the TV or radio.  

The moral of this story.  Don’t watch the news I suppose.  Or at least, don’t let their negative coverage play on your mind.  It’s very easy to, I absolutely understand. But there are some absolutely fantastic investment opportunities out there, even more so when this whole page in history finally gets turned.

And as ever, if you ever need a chat, I’m here.

Anyway, to finish, our playlist this week is Motown.  Have a great weekend; I’ve just hired a skip and will be busily filling it #livingthedream


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