Key takeaways from the week

  • Majority of stock indices were down sharply in response to the United Kingdom's decision to leave the European Union on Friday. The FTSE100 was however up 1.95% on the week because of a mid-week rally;
  • While stocks fell, bond prices went up, highlighting the importance of diversification through volatile markets; and
  • It's impossible to know with certainty which direction markets will head from here, but if you maintain the mix of stocks and bonds that is right for your comfort level, risk and long-term financial goals, we believe that you will be well prepared to stay invested through volatile markets from here.

And they were wrong...

The recent vote result in the UK is another example of where the majority of those who are paid to make predictions were wrong. The polls and the bookmakers had it at 'remain'.

You may not like the direct parallel with active investment management, but the two worlds are intrinsically linked and a prediction is simply a guess regardless of how cleverly and by how many people it is supported.

'Remain' was widely viewed as the safer option in this already volatile and difficult economic climate.

The voting market had different ideas though. Whether it was a reaction to the emotionally charged ‘out’ campaign’, or a triumph of the nationalistic heart over the economic mind, voters turned out in their droves to rubbish the predictions that people fear uncertainty and change.

As we see time and time again, trying to outsmart the market rarely works.

No one knows what happens next, but we do know you should remain invested, stick to your long term plan and get in touch with us about removing non-market risk from your portfolio.

If you are unsure how then please speak to us today.

 

Market data

Equity Indices Value Weekly Change
FTSE 100 6,138.69 1.95%
S&P 500 2,037.41 -1.63%
Hang Seng 20,259.13 0.44%
Nikkei 225  14,952.02 -4.15%
Dax 30 9,557.16 -0.77%
Shanghai Composite Index 2,854.28 -1.07%
Bonds  Value Weekly Change
US 10 yr 1.57% -2.55%
UK 10 yr 1.08% -5.56%
Commodities / Energy Price Weekly Change
Gold $1,322.40 2.61%
Brent Crude Oil $48.72 0.04%
Currencies Majors Value Weekly Change 
EUR-USD 1.1145 -1.11%
USD-JPY 102.27 -1.95%
GBP-USD 1.3624 -5.15%
Central Bank  Rate
Fed Reserve 0.50%
ECB 0.00%
Bank of England 0.50%
Bank of Japan -0.10%
Prices as at Friday 24 June 2016

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