Investing well is best policy in Brexit tale of uncertainty

With the countdown to Brexit quickly ticking away, Managing Director of Rhodes Wealth Management offers his thoughts.

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MARCH 2019 may be hurtling towards us and there may be uncertainty around the final look of our Brexit deal but investors can be assured that many assumptions have already been priced into markets.

History demonstrates that there is likely to be an economic and financial impact from the UK leaving the European Union but there is grist for both sides of the debate.

While economists such as

Brexit is likely to cause an economic and financial impact on the UK. Nicholas Crafts might say the data implies there will be a cost to leaving the EU, others such as Alan Sked might see advantages for the UK in having a cheaper currency.

What is certain is that we do not know how the UK economy will fare outside the EU and how great an impact different types of exit deal might have.

For investors, it is worth remembering that the FTSE All Share Index rose through the 1970s and has risen through the 2010s and that its constituent companies have continued to pay out dividends over the long term.

Of course, major political changes can adversely affect individual companies. However, in most cases, the companies themselves are largely to blame, whether due to poor management, a lack of innovation, mismanaged finances, or failure to respond to technological changes.

While fund managers need to bear political developments in mind, investing in quality companies for the long term will always be the best insurance policy against any political shocks that are felt along the way. Achieving that requires not merely good analysis and judgment but an aptitude for not allowing investment decisions to be ruled by emotions. Whatever the cost of Brexit, history suggests that short-term fear is likely to cost investors far more. Meanwhile, whatever an individual’s view of Brexit, it is worth businesses preparing for the new opportunities that it will

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■■The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Investing in quality companies for the long term will always be the best insurance policy against any political shocks

■■The information contained does not constitute investment advice. It is not intended to state, indicate or imply that current or past results are indicative of further results or expectations. Full advice should be taken to evaluate risks, consequences and suitability of any prospective fund or investment.

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