Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
We are now just days away from a US presidential election that could change the course of global markets. At the same time we are dealing with a pandemic situation that is constantly changing and currently reportedly gaining momentum by the day. We are also in the midst of not so much an eleventh hour attempt as a very last minute chance to broker some sort of Brexit deal; despite time having run out already, allegedly.
The EU and UK will today embark on an intensive final round of Brexit talks, with face to-face talks in the offing this afternoon following a call lasting about an hour between the EU’s chief negotiator Michel Barnier and his UK counterpart, David Frost.
But even with renewed hopes of a last minute dash to secure a deal - which boosted sterling, up 1.6% against the dollar on Wednesday to trade at more than $1.31 for the first time since early September - it’s little wonder that markets, and investors, are collectively holding their breath right now.
We know things don’t always go as we would want, or hope, or even the polls would have us believe they will. Just cast your mind back to two very familiar events four years ago. First there was the shock Brexit referendum outcome and then the shock victory of Donald Trump. In 2016 the US election outcome triggered market convulsions and Brexit triggered an historic drop in Sterling. And anyone who got caught out by either (or both) will no doubt remember it even more clearly than the rest of us.
So far 2020 has the makings of more shock events and then some with the pandemic an added shocker to cap it all. Little wonder at all then that investors are playing the watching and waiting game right now. Not making a decision is a decision in itself and one that could very well turn out to be the only one worth making right now.
That doesn’t, of course, mean selling out or abandoning what you have started. Quite the contrary. The prudent stance is to carry on, as normal, planning ahead and looking forwards, beyond 2020 and what it has so far thrown at us. The longer-term view is the one to focus on.
Being ready to act once events materialise is, of course, sensible. But even very recent history has shown that picking a winner or guessing the outcome of something that will, one day, be resolved, is more akin to a fool’s game.
Now is a time of many questions with very few answers to go round, so making a binary choice based on any one of these potentially market-moving events is best avoided. Would you have made the ‘right’ decision in 2016 when you compare it to what we subsequently found out?
While we don’t claim to have all the answers, we do have something that may help. Tom Stevenson’s latest Investment Outlook, which has just been released and is accompanied by a webcast and podcast in which Tom directly answers your questions, takes a calm and considered look at the months ahead.
In the meantime, staying invested and focusing on the bigger picture will pay dividends.
Get the Investment Outlook
Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.