December 14th, 2016
‘A certain uncertainty’
My favourite radio station is Radio 4, I am unashamed to admit. I start the day with the ‘Today Programme’ and finish it with Eddie Mair on ‘PM’. As well as keeping up to date with current affairs, I am often bestowed with some interesting fact, something that ordinarily would never have crossed my path. Like who knew that John Goodenough, a Professor of Engineering at the University of Texas, invented the rechargeable lithium-ion battery, which is part of almost every portable electronic device, making the mobile telephone possible.
Inevitably many of the discussions centre around the political and economic climate and the uncertainties that may lie ahead. The description that stuck with me the most as put forward by one of the commentators is that ‘A certain uncertainty is approaching’. As we have seen from the result of the EU referendum, opinion is divided as to whether Brexit is the best thing to happen to our country since England won the World Cup or Andy Murray won Wimbledon, or an economic disaster in the making. Whatever your opinion, the situation is as it is and our best option is to make the very best of it.
I think it is undeniable to say though that we face many uncertainties. Since the Conservative Party conference the pound has fallen against the dollar and against the Euro. This has highlighted the prospect of higher inflation, with concern that higher imported prices will feed through to our cost of living. We have seen evidence of this with the recent spat between Tesco and Unilever. If you draw an income from your investments, it may be an appropriate time to review them to ensure that you have the right investment strategy in place to cope with any increased demands on your monies.
Levels of risk should also be a key consideration to every investor. If markets do become volatile then some investors may be exposed more to the effects of this than others. Now is the time to start considering what your appetite for risk is and how willing you are to accept losses and then figure out whether your investments suit your risk profile.
There has never been a more important time to consult your financial adviser, to discuss with them how your investments have been performing and discuss your attitude to investment risk. If you have put off your regular review then now is the time to call your adviser and seek their guidance on how to navigate the unchartered territory ahead.
If a ‘Certain Uncertainty’ is approaching then my advice is to be prepared.
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Written by: Vanessa Coates – Financial Planning Consultant, Prosser Knowles Associates Limited
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