Kjernen i denne kampen er spørsmålet om graden av og formen for Storbritannias fremtidige medvirkning i EUs «indre marked». Det er en historiens ironi at dette åpne, indre markedet for EU ble skapt på 1980-tallet med avgjørende politisk støtte fra britenes konservative statsminister, Margaret Thatcher. For henne var fri handel et overordnet politisk mål. For å få det på plass, var hun villig til å godta fri bevegelse av arbeidskraft og (om enn motvillig) en felles EU-domstol, som skulle overvåke spillereglene.

Det er disse to forutsetningene – fri bevegelse og en felles domstol – hennes etterfølger Therese May vil fjerne, «for å gjenvinne Storbritannias suverenitet», som hun sier. Vi i Norge vet hvordan «suverenitet» – «sjølråderett» – lett blir et politisk kamprop, uten blikk for hva den praktiske realitet i begrepet «suverenitet» er i dag.

Oppslutning om EU

Tyskland har allerede signalisert sitt ståsted foran Brexit-forhandlingene. Berlin gir øverste prioritet til samholdet mellom «de 27» gjenværende EU-land, for EU-samarbeidet er selve fundament under tysk utenrikspolitikk gjennom mer enn et halvt århundre. For det annet vil tyskerne bruke tid og være åpne for praktiske Brexit-løsninger, så lenge disse ikke undergraver EUs samhold. Og for det tredje vil Angela Merkels regjering gjennomføre Brexit uten endringer i EUs grunnleggende traktater. Da kan ingen forutsi utfallet, for 27 stater skal godkjenne endringene. Tyskland går til valg på ny nasjonalforhandling i september 2017; en forsiktig valgkamp er allerede kommet i gang.

Frankrikes president Francois Hollande har bedt om høyere tempo for en Brexit-avklaring. Han har også pekt på at landet vil stå midt oppe i en president-valgkamp våren 2017, mens statsminister May har erklært at hun «innen utgangen av mars» vil komme med sin formelle søknad om å forlate EU. Deretter har britene en overgangsfrist på to år.
På tross av all uenighet mellom EU-landene, viser det seg igjen og igjen at den generelle oppslutning om EU nok er noe svekket, men fortsatt sterk i medlemslandene. Det gjelder f.eks. også i Polen, der regjeringen ofte ligger i strid med EU-organene.

Politisk pragmatisme?

Studerer vi det politiske landskapet, er det lett å se at den virkelige avstand i holdninger mellom britene og andre i EU ikke alltid er stor. Innvandring er nå en kampsak i nesten alle EU-land. Er det da mulig å definere «fri bevegelse av arbeidskraft» på en slik måte at mottakerlandet får en viss styring med hvem som kommer inn? Det blir en delikat oppgave. Men en så sentral politiker som Frankrikes Alain Juppé – favoritt på borgerlig side foran presidentvalget – har i sommer sagt at her burde britene og EU kunne finne en pragmatisk løsning.

Verdenshandelen har stagnert de siste par årene, slik at motivet er sterkt hos alle for å understøtte internasjonal handel. Det skulle tale for pragmatisme hos EU og britene, med sikte på å holde handels-volumene oppe. Men begge presidentkandidater i USA er – i likhet med USAs velgere – skeptiske til mer frihandel, og til frihandel rent generelt. I en slik situasjon vil UK og de fleste EU-landene være interessert i å sikre at verdenshandelen ikke svekkes. Det internasjonale pengefond (IMF) har uttrykt bekymring for at valget i USA og Brexit vil virke dempende på den økonomiske aktiviteten i verden. Disse politiske bakteppene kan trolig gjøre det lettere å få på plass en pragmatisk handels-løsning mellom UK og EU.

Tidkrevende

Storbritannia må ikke bare forhandle frem en avtale om hvordan uttrekningen fra EU skal foregå, og en avtale om overgangsperioden. Viktigere er en bred avtale om UKs fremtidige forhold til EU, samt en helt ny avtale med verdens handelsorganisasjon, WTO. I tillegg ønsker britene avtaler om frihandel med de fleste av verdens land. Det vil kreve mye tid – og langt mer enn to år.

Det vil også påvirke forhandlingene at Theresa May styrer en politisk kurs bort fra en «kjølig» konservatisme, som har kjennetegnet partiet siden Thatcher, og beveger seg i retning av en mer sosial stat. Også EU står oppe i en strid om hvordan styringssystemet skal virke i praksis. EU-parlamentet har tiltatt seg mer makt, f.eks. ved utnevningen av Jean-Claude Juncker som president for EU-kommisjonen. Samtidig forsøker nasjonalstatene i EU i voksende grad å styre arbeidet i Kommisjonen. Nå heter det at også EU-parlamentet må godkjenne en fremtidig samarbeidsavtale med Storbritannia, noe som vil gjøre drøftelsene enda mer kompliserte. CETA – EUs nye handelsavtale med Canada – ble tatt ut av Kommisjonens hender og gjort til en sak for hvert EU-lands folkevalgte. Tidligere var handelsspørsmål forbeholdt Kommisjonen alene.

Et splittet Storbritannia?

Ved folkeavstemningen var Nord-Irland, Skottland og London klart i favør av «Remain» – bli i EU – mens særlig de tradisjonelle Labour-regionene stemte «Leave» – gå ut. Nå har Skottlands førsteminister, Nicola Sturgeon, krevet adgang til EUs indre marked, og truet med en ny folkeavstemning om skotsk løsrivelse fra Storbritannia, hvis en slik adgang ikke sikres. Det hører med til dette bildet at Theresa Mays bare har et knapt flertall i Underhuset – og der er godt over 90 prosent av hennes konservative folkevalgte fra de klassiske engelske deler av landet. I resten av Storbritannia er partiet nesten uten representasjon.

En uklar Brexit

Hittil er det ikke klarlagt hvordan Underhuset – som har siste ord i britisk politikk – skal ta stilling til Brexit. Skal forhandlingsresultatet forlegges de folkevalgte – eller folket i et nytt valg eller i en ny folkeavstemning? Her er ingen svar gitt. Både Tony Blair – tidligere statsminister – og Donald Tusk, polsk formann i EUs råd, har pekt på disse uklarhetene. Og de har ikke villet utelukke en reversering av Brexit, når følgene av en uttreden fra EU blir kjent. Men Therese May insisterer i dag på at hennes oppgave å sette folkeavstemningens resultat om i praktisk politikk.

Spørsmålene er langt flere enn svarene rundt Brexit. En britisk utmarsj vil også berøre NATO og samarbeidet om forsvar i Europa. Tyskere og franskmenn har lenge ønsket et felles sivilt-militært hovedkvarter for EU-landene. Den gamle forestillingen om et to-pilar-system for atlantisk samarbeid – der USA og Europa utgjør hver sin pilar – blir også utfordret av Brexit. Hvor blir da Storbritannias plass?

Vi ser tydeligere og tydeligere at Brexit varsler et politisk oppbrudd i Europa.

 

Av: Nils Morten Udgaard

Nils Morten Udgaard er tidligere utenriksredaktør i Aftenposten og har vært avisens korrespondent i London, Moskva og Bonn/Berlin. Han var statssekretær for utenrikspolitikk hos statsminister Kåre Willoch 1984-1986, g professor II ved Universitetet i Bergen 1991-1997. Han har en doktorgrad i internasjonal politikk fra London School of Economics.

Del innlegget:

To some this is a good day, to others it is not.  But we are where we are and we need to look forward to where we go from here.

We should not, however, lose sight of the fact that what we have witnessed is a long-standing, robust and stable democracy at work with both sides attempting to sway voters with the power of argument, passion and belief.  Although we have seen some dubious use of facts and figures, some scaremongering on both sides and some less than savoury comments at the fringes, this process has been free of violence, open to all and with everyone’s vote holding the same sway; that we should be both proud of and reassured by.

We are also seeing the markets at work, trying to make sense of what this all means and reflecting the aggregate view in market prices.  We are likely to see market gyrations over the coming weeks and months, but we should all remember to view it as short-term noise.   There are many ‘known unknowns’ as Donald Rumsfeld would say: we face an uncertain and likely tough negotiation to exit the EU, with unknown outcomes; an increased likelihood of another Scottish referendum and threat to the Union; and the knowledge that broad change is upon us.

As individual’s we need to try not to worry about things that we can’t control, such as what will happen to the UK economy over the next five years, or where the markets go in the next few days, weeks and months.  We should focus on things that we can control such as the structure of our investment portfolios.  As we have explained before, your portfolio is well positioned to weather this storm, both in its structure and the high quality funds that we recommended to execute your portfolio strategy with.  To reiterate:

Your portfolio is global diversified in terms of its equity exposure

It is worth remembering that the UK economy represents less than 5% of global GDP, and its equity market is around 6% of global market capitalisation.  The stock market is also not a direct proxy for the UK economy as many of its constituents have considerable overseas operations, such as HSBC and Shell.  In fact, around 70% of earnings from FTSE 100 companies come from overseas.

Your portfolio has well-diversified exposure to other developed equity markets and emerging markets economies and companies, which will help to mitigate any UK-specific market fall.  Equity markets as a whole might be volatile, but that is the nature of equity investing, and being diversified will help.

A fall in sterling is actually beneficial to portfolio performance for sterling based investors

Friday morning saw a big fall in Sterling against the US dollar and the Euro.  Ironically, this fall is beneficial to your portfolio if it is denominated in Sterling as the non-Sterling denominated overseas assets that you own are now worth more in Sterling terms.  That is an example of good diversification in action.

Owning short-dated, high quality global bonds delivers strong defensive qualities

The primary defensive assets in your portfolio are short-dated, high quality bonds, diversified on a global basis.   At times of market uncertainty, money tends to flood from more risky assets (equities and low quality bonds) into high quality bonds, driving yields down and prices up.  We have already seen early signs of this happening in the major bond markets this morning.

Have faith in your portfolios and resist the urge to look at its value too often. You don’t need this money today or tomorrow, so try not to worry about any short-term falls; that is the nature of investing.  This is a long-term strategy to meet your long-term goals.

After last night’s dramatic result our advice is as before – Keep Calm and Carry On.  Whilst markets have reacted savagely to the Leave vote, overreactions are not uncommon. The best advice at the moment is to remain calm with one’s investments and look for opportunities to rebalance portfolios as they arise.  As ever for any concerns you might have please call either Richard or Nils-Odd.

Del inlägget:

To some this is a good day, to others it is not.  But we are where we are and we need to look forward to where we go from here.

We should not, however, lose sight of the fact that what we have witnessed is a long-standing, robust and stable democracy at work with both sides attempting to sway voters with the power of argument, passion and belief.  Although we have seen some dubious use of facts and figures, some scaremongering on both sides and some less than savoury comments at the fringes, this process has been free of violence, open to all and with everyone’s vote holding the same sway; that we should be both proud of and reassured by.

We are also seeing the markets at work, trying to make sense of what this all means and reflecting the aggregate view in market prices.  We are likely to see market gyrations over the coming weeks and months, but we should all remember to view it as short-term noise.   There are many ‘known unknowns’ as Donald Rumsfeld would say: we face an uncertain and likely tough negotiation to exit the EU, with unknown outcomes; an increased likelihood of another Scottish referendum and threat to the Union; and the knowledge that broad change is upon us.

As individual’s we need to try not to worry about things that we can’t control, such as what will happen to the UK economy over the next five years, or where the markets go in the next few days, weeks and months.  We should focus on things that we can control such as the structure of our investment portfolios.  As we have explained before, your portfolio is well positioned to weather this storm, both in its structure and the high quality funds that we recommended to execute your portfolio strategy with.  To reiterate:

Your portfolio is global diversified in terms of its equity exposure

It is worth remembering that the UK economy represents less than 5% of global GDP, and its equity market is around 6% of global market capitalisation.  The stock market is also not a direct proxy for the UK economy as many of its constituents have considerable overseas operations, such as HSBC and Shell.  In fact, around 70% of earnings from FTSE 100 companies come from overseas.

Your portfolio has well-diversified exposure to other developed equity markets and emerging markets economies and companies, which will help to mitigate any UK-specific market fall.  Equity markets as a whole might be volatile, but that is the nature of equity investing, and being diversified will help.

A fall in sterling is actually beneficial to portfolio performance for sterling based investors

Friday morning saw a big fall in Sterling against the US dollar and the Euro.  Ironically, this fall is beneficial to your portfolio if it is denominated in Sterling as the non-Sterling denominated overseas assets that you own are now worth more in Sterling terms.  That is an example of good diversification in action.

Owning short-dated, high quality global bonds delivers strong defensive qualities

The primary defensive assets in your portfolio are short-dated, high quality bonds, diversified on a global basis.   At times of market uncertainty, money tends to flood from more risky assets (equities and low quality bonds) into high quality bonds, driving yields down and prices up.  We have already seen early signs of this happening in the major bond markets this morning.

Have faith in your portfolios and resist the urge to look at its value too often. You don’t need this money today or tomorrow, so try not to worry about any short-term falls; that is the nature of investing.  This is a long-term strategy to meet your long-term goals.

After last night’s dramatic result our advice is as before – Keep Calm and Carry On.  Whilst markets have reacted savagely to the Leave vote, overreactions are not uncommon. The best advice at the moment is to remain calm with one’s investments and look for opportunities to rebalance portfolios as they arise.  As ever for any concerns you might have please call either Richard or Nils-Odd.

 

Share this:

In this brief note, we raise a number of potential risks that exist and how these are mitigated, to a large extent, by the current structure of your portfolio. We do not seek to analyse the debate, provide our slant on it, or steer you in any direction.

How did we get to this?

There is no doubt that the decision that UK voters will make is a big one, with material consequences for the long-term nature of who/what we want to be as a nation. It is by no means an easy decision and is made no easier by the polarised positions of both camps that has resulted in unedifying personal attacks, the loose use of data, personal ambition and party division.

Today’s referendum is a long way from the heady days of 1973 when the UK – urged on by Ted Heath – became a fully paid-up member of the European Economic Community (EEC), by an emphatic margin of two to one. It may surprise some that back then those pushing for entry were the Tories and it was the Labour Party that was riven with in-fighting. Thatcher’s EU budget rebate in 1985 – which still rankles with some – and short-lived membership of the Exchange Rate Mechanism in 1992, were early milestones in the up-and-down relationship between the UK and the EU.

Despite the EU’s faults and challenges – not least the future of the Euro and coping with mass migration – it is easy to overlook the fact that, in all of its guises since the Treaty of Rome in 1957, the EU has been central to co-operation and peace between the nations of Europe, extending the principles of democracy and tolerance to its expanded ex-Soviet bloc members. That in itself is quite an achievement not to be dismissed – or risked – lightly.

How does all this relate to your portfolio?

Much has been written in the financial media about the need to position investor portfolios for a vote to leave (Brexit). Yet that presupposes that we, as your advisers (or any other investment professional for that matter) can, in some way, foresee what is going to occur and thus reposition your portfolio accordingly. It also presupposes that BREXIT is a bigger risk to your portfolio than, say Putin’s increasing militarism, the enduring tragedy of events in the Middle East, North Korea’s nuclear sabre rattling, Donald Trump becoming the next US president, or some other geo-political event or natural disaster that we cannot foresee.

When we established your portfolio, we did so knowing that any number of such events would be likely to occur with monotonous regularity over the time you will be invested. The aim therefore is not to try to reposition the portfolio for each such event – remember that the market’s view of potential outcomes is already reflected to some extent in market prices – but to build a robust, well-diversified portfolio to weather all investment seasons, with an appropriate level of risk for you, and to stay the course.

That said, we believe that there are short-term market risks to a vote to leave the EU that are worth understanding, which we highlight below:

Risk 1: Greater volatility in the UK (and other) equity markets

It is certainly possible that the UK equity market could suffer increased volatility – including a market fall – as the market tries to come to terms with what this means for the UK economy and the impact on the wider global economy.

Risk 2: A fall i Sterling against other currencies

Much has been made of a fall in Sterling against other global currencies, which has already been reflected to some degree in exchange rate movements since the start of 2016. For example, Sterling fell from 1.48 against the US dollar to 1.45 and from 1.36 to 1.27 against the Euro but has subsequently recovered some ground.

Risk 3: A rise in UK bond yields (and thus a fall in bond prices)

The Chancellor, amongst others, has stated that the cost of borrowing might rise as investors looking to hold bonds issued by the UK Government (and UK corporations), will demand higher yields on these bonds in compensation for the greater perceived risks of the uncertainty surrounding the decision to leave the EU.

Looked at in isolation, these may appear to be significant risks. Yet as part of a well-diversified and sensibly constructed portfolio, their impact can be greatly reduced.

Mitigant 1: Global deversification of equity exposure

It is worth remembering that the UK economy represents less than 5% of global GDP, and its equity market is around 6% of global market capitalisation. The stock market is also not a direct proxy for the UK economy as many of its constituents have considerable overseas operations, such as HSBC and Shell. In fact, around 70% of earnings from FTSE 100 companies come from overseas.
Your portfolio has well-diversified exposure to other developed equity markets (e.g. the US, Japan, Germany and Australia) and emerging markets economies and companies (e.g. Taiwan, China, India and South Korea), which will help to mitigate any UK-specific market fall. Equity markets as a whole might be volatile, but that is the nature of equity investing, and being diversified will help. Changing the mix between bonds and equities would be ill-advised. Provided you do not need the money today – which you do not – you should hold your nerve and stick with your strategy.

Mitigant 2: Owning non-Sterling assets and currencies in the growth assets

In the event that Sterling takes a beating, it is worth remembering that the non-UK equities that you own come with the currency exposure linked to those assets. For example, owning US equities comes with US dollar exposure, as we do not hedge the exposure out. If the Pound falls e.g. against the US dollar, these US assets are now worth more in Sterling terms, thus mitigating the fall in Sterling to some extent. In short, a fall in Sterling has a positive effect on non-UK assets that are unhedged.

The bond element of your portfolio has is hedged into your home currency to avoid mixing the higher volatility of currency movements with the lower volatility of short-dated bonds.

Mitigant 3: Owning short-dated, high quality and globally diversified bonds

The primary defensive assets in your portfolio are short-dated, high quality bonds, diversified on a global basis. Short-dated bonds are less volatile than longer-dated bonds and their prices will be less affected by any rise in yields. High quality bonds, tend to be where money flows to at times of equity market trauma, driving yields down and prices up, at least in the short term. Your bond holdings are also diversified across a number of different global bond markets, which mitigates the risk of a rise in UK yields (and thus falling prices), as the cost of borrowing in other markets will not be impacted in the same way.

Sticking to your strategy

At times like this, it is easy to become overly concerned about near-term events, such as the outcome of this referendum. Your life as an investor will inevitably be punctuated by an ongoing series of near-term events, making life continually uncomfortable, unless you view them in context. Below we reiterate a few thoughts that might be helpful. Remember:

• The value of your portfolio simply tells you how much money you would have if you liquidated your portfolio today, which you have no intention of doing. You only make actual losses if you sell assets. If you don’t sell them, they remain in your portfolio to deliver future returns.
• Your portfolio has a well-thought-out structure – as we explored above – that has been designed to provide you with the best chance of a favourable long-term investment experience. Stick with it.
• Some assets will be doing well at times and others less so. No-one knows which asset(s) it will be at any point in time. Markets work well enough to make jumping from one asset class to another a dangerous gambling strategy.
• Your adviser cannot control what markets do, nor can fund managers. Markets will do what they do.

Whether your inclination is to remain or leave, try not to worry too much about the consequences on your portfolio as you are well-positioned to weather any storms. ‘This too shall pass’, as the investment sage John Bogle has said many times before at other seemingly concerning times.

Del inlägget:

In this brief note, we raise a number of potential risks that exist and how these are mitigated, to a large extent, by the current structure of your portfolio. We do not seek to analyse the debate, provide our slant on it, or steer you in any direction.

How did we get to this?

There is no doubt that the decision that UK voters will make is a big one, with material consequences for the long-term nature of who/what we want to be as a nation. It is by no means an easy decision and is made no easier by the polarised positions of both camps that has resulted in unedifying personal attacks, the loose use of data, personal ambition and party division.

Today’s referendum is a long way from the heady days of 1973 when the UK – urged on by Ted Heath – became a fully paid-up member of the European Economic Community (EEC), by an emphatic margin of two to one. It may surprise some that back then those pushing for entry were the Tories and it was the Labour Party that was riven with in-fighting. Thatcher’s EU budget rebate in 1985 – which still rankles with some – and short-lived membership of the Exchange Rate Mechanism in 1992, were early milestones in the up-and-down relationship between the UK and the EU.

Despite the EU’s faults and challenges – not least the future of the Euro and coping with mass migration – it is easy to overlook the fact that, in all of its guises since the Treaty of Rome in 1957, the EU has been central to co-operation and peace between the nations of Europe, extending the principles of democracy and tolerance to its expanded ex-Soviet bloc members. That in itself is quite an achievement not to be dismissed – or risked – lightly.

How does all this relate to your portfolio?

Much has been written in the financial media about the need to position investor portfolios for a vote to leave (Brexit). Yet that presupposes that we, as your advisers (or any other investment professional for that matter) can, in some way, foresee what is going to occur and thus reposition your portfolio accordingly. It also presupposes that BREXIT is a bigger risk to your portfolio than, say Putin’s increasing militarism, the enduring tragedy of events in the Middle East, North Korea’s nuclear sabre rattling, Donald Trump becoming the next US president, or some other geo-political event or natural disaster that we cannot foresee.

When we established your portfolio, we did so knowing that any number of such events would be likely to occur with monotonous regularity over the time you will be invested. The aim therefore is not to try to reposition the portfolio for each such event – remember that the market’s view of potential outcomes is already reflected to some extent in market prices – but to build a robust, well-diversified portfolio to weather all investment seasons, with an appropriate level of risk for you, and to stay the course.

That said, we believe that there are short-term market risks to a vote to leave the EU that are worth understanding, which we highlight below:

Risk 1: Greater volatility in the UK (and other) equity markets

It is certainly possible that the UK equity market could suffer increased volatility – including a market fall – as the market tries to come to terms with what this means for the UK economy and the impact on the wider global economy.

Risk 2: A fall i Sterling against other currencies

Much has been made of a fall in Sterling against other global currencies, which has already been reflected to some degree in exchange rate movements since the start of 2016. For example, Sterling fell from 1.48 against the US dollar to 1.45 and from 1.36 to 1.27 against the Euro but has subsequently recovered some ground.

Risk 3: A rise in UK bond yields (and thus a fall in bond prices)

The Chancellor, amongst others, has stated that the cost of borrowing might rise as investors looking to hold bonds issued by the UK Government (and UK corporations), will demand higher yields on these bonds in compensation for the greater perceived risks of the uncertainty surrounding the decision to leave the EU.

Looked at in isolation, these may appear to be significant risks. Yet as part of a well-diversified and sensibly constructed portfolio, their impact can be greatly reduced.

Mitigant 1: Global deversification of equity exposure

It is worth remembering that the UK economy represents less than 5% of global GDP, and its equity market is around 6% of global market capitalisation. The stock market is also not a direct proxy for the UK economy as many of its constituents have considerable overseas operations, such as HSBC and Shell. In fact, around 70% of earnings from FTSE 100 companies come from overseas.
Your portfolio has well-diversified exposure to other developed equity markets (e.g. the US, Japan, Germany and Australia) and emerging markets economies and companies (e.g. Taiwan, China, India and South Korea), which will help to mitigate any UK-specific market fall. Equity markets as a whole might be volatile, but that is the nature of equity investing, and being diversified will help. Changing the mix between bonds and equities would be ill-advised. Provided you do not need the money today – which you do not – you should hold your nerve and stick with your strategy.

Mitigant 2: Owning non-Sterling assets and currencies in the growth assets

In the event that Sterling takes a beating, it is worth remembering that the non-UK equities that you own come with the currency exposure linked to those assets. For example, owning US equities comes with US dollar exposure, as we do not hedge the exposure out. If the Pound falls e.g. against the US dollar, these US assets are now worth more in Sterling terms, thus mitigating the fall in Sterling to some extent. In short, a fall in Sterling has a positive effect on non-UK assets that are unhedged.

The bond element of your portfolio has is hedged into your home currency to avoid mixing the higher volatility of currency movements with the lower volatility of short-dated bonds.

Mitigant 3: Owning short-dated, high quality and globally diversified bonds

The primary defensive assets in your portfolio are short-dated, high quality bonds, diversified on a global basis. Short-dated bonds are less volatile than longer-dated bonds and their prices will be less affected by any rise in yields. High quality bonds, tend to be where money flows to at times of equity market trauma, driving yields down and prices up, at least in the short term. Your bond holdings are also diversified across a number of different global bond markets, which mitigates the risk of a rise in UK yields (and thus falling prices), as the cost of borrowing in other markets will not be impacted in the same way.

Sticking to your strategy

At times like this, it is easy to become overly concerned about near-term events, such as the outcome of this referendum. Your life as an investor will inevitably be punctuated by an ongoing series of near-term events, making life continually uncomfortable, unless you view them in context. Below we reiterate a few thoughts that might be helpful. Remember:

• The value of your portfolio simply tells you how much money you would have if you liquidated your portfolio today, which you have no intention of doing. You only make actual losses if you sell assets. If you don’t sell them, they remain in your portfolio to deliver future returns.
• Your portfolio has a well-thought-out structure – as we explored above – that has been designed to provide you with the best chance of a favourable long-term investment experience. Stick with it.
• Some assets will be doing well at times and others less so. No-one knows which asset(s) it will be at any point in time. Markets work well enough to make jumping from one asset class to another a dangerous gambling strategy.
• Your adviser cannot control what markets do, nor can fund managers. Markets will do what they do.

Whether your inclination is to remain or leave, try not to worry too much about the consequences on your portfolio as you are well-positioned to weather any storms. ‘This too shall pass’, as the investment sage John Bogle has said many times before at other seemingly concerning times.

 

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