FINANCE
Making the most of your investments in times of uncertainty Headlines about fluctuating stock markets and share price volatility seem to be a weekly occurrence – but what was 2016 like for investors and what will this year bring?
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ICHARD Allen, Portfolio Manager at Vartan Ravenscroft Stockbroking & Investment Management, which is based in the Precincts of Peterborough Cathedral, says 2016 will be remembered as the year of great political upsets. The first six months of last year saw markets dominated by the Brexit referendum and in June we got the answer: the UK public voted for dramatic change – leaving the European Union. “Markets, as they usually do, reacted emotionally but soon calmed down. In economic terms, the key assumption from some economists was that the UK would quickly fall into recession. Given the recent success of political and economic commentators to forecast short term outcomes, we took this message with a ‘large pinch of salt’.” Mr Allen says there will undoubtedly be winners and losers in the UK’s new relationship with the EU and it was important for investors not to get too caught up with domestic politics. The second half of 2016 saw investors’ attention cross the Atlantic to another bitterly contested political event - the US presidential election. “The initial reaction in stock markets was somewhat muted. Indeed, as the year drew to a close, developed markets were able to end the year on a high note with investors buoyed by the potential of a change in US economic policy towards one of tax cuts and increased spending on Infrastructure.”
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urning to 2017, the year started with the global economy seeing steady levels of growth and an expectation of higher corporate profits. “Past worries over the negative impact of China’s slowdown have been largely overcome and the Chinese economy continues to avoid the hard landing that many pessimists had predicted. However, the Chinese authorities’ habit of throwing money at problems may be storing up trouble for the future, so we continue to adopt an overall defensive slant.” Looking further ahead, Mr Allen says that politics will undoubtedly continue to make the headlines with Trump’s unpredictability, elections in France, the Netherlands and Germany and Brexit negotiations moving up a gear with the triggering of Article 50. “From an investors’ viewpoint as the range of potential outcomes is too wide to predict, we firmly believe that the focus should be on valuations and ultimately knowing what you own in your portfolio,” he said. “Domestically in the UK, the weakness in sterling and the increase in commodity prices suggest that there may be an uptick in inflation. With interest rates at a low level, this will make it even more important for investors to seek out assets that are capable of delivering a real return. “Whatever happens, one of the most important factors in protecting your investments will be to ensure you have the right advice. We know from our own clients that long-standing family firms like Vartan Ravenscroft provide them with the comfort of knowing that they can pick up Vartan Ravenscroft is a long-standing and the phone and speak to one of the team who experienced stockbroker and investment will know who they are, where their investments management firm based in Peterborough. are and what their risk appetite is. Our clients Their highly professional and personal aren’t simply numbers, they are people who have service is at the heart of the company, worked hard to build up their savings and we and that, combined with their passion for want to find the right opportunities for them.” finding opportunities that others do not see, truly sets the apart from the rest.
ABOUT VARTAN RAVENSCROFT
• Please remember that the value of investments and any income derived from them can fall and your capital is at risk meaning that you may get back less than you originally invested.
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STAMFORD LIVING FEBRUARY 2017
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