“For investors there is little short-term good that can come from all this…” Towry

by | Jun 24, 2016

Share this article

brexit 2016 new and updates

Andrew Wilson, head of investment at Towry, the wealth manager, said: “For investors there is little short-term good that can come from all this, as the Brexit vote is going to cause excess volatility and increased risk premia. What we will now see is the massive unwinding of positions and hedges that were placed around this event, although these will no doubt be built up again around the forthcoming US elections. Increased volatility also means an increased chance for active portfolio managers to prove their worth by making good decisions that materially benefit the investments of their clients.

“As we look forward, a wider risk is that an anti-globalisation and anti-internationalism trend takes hold, as this will further push a policy prescription of protectionism and increased trade barriers. Fundamentally, the more difficult it becomes to move capital, goods, people and jobs around the world, then the less easy it will be to grow invested wealth, the more chance that standards of living drop rather than rise, and actually the tougher it is to be a smaller or specialised political entity.

“Whilst everyone will be monitoring closely, no one knows with any great certainty how markets will react to Brexit – not over one day, one week or one year. Indeed the initial move after an exogenous event often turns out to be the wrong one, and for all those with precise forecasts, it is usually better to travel than to arrive. An already properly diversified investor should be able to select which battle they want to fight, in markets that are liable to be emotional, irrational, and driven by anything other than fundamentals.


“As ever, history would suggest that investors should try not to panic, and instead stick to their long term plans. If they also have diversified and regularly rebalanced portfolios, then it would be highly unusual to experience inferior performance, over time, and, on the contrary, good decisions even in the most volatile of markets can materially improve the outcome.”




IFA Magazine’s Brexit coverage is supported by Old Mutual Global Investors. Join them on Tuesday 28 June at 9.30am when Mishal Husain talks to Richard Buxton and team in a LIVE video interview. Register now.


Share this article

Related articles

Which European country has the most graduate jobs in finance?

Which European country has the most graduate jobs in finance?

Finance continues to dominate as one of the most desirable career paths for recent graduates, partly due to the generous salaries that finance roles provide.   Whilst there are plenty of finance graduate job listings all around Europe, which country has the most? CMC...

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, designed to fit perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode