"Our review this month identified a need to broaden our clients’ overall exposure to risk, due to a number of economic uncertainties on the horizon, not least tentative moves being made by Central Banks across the world, rising inflation and the ongoing challenges of Brexit negotiations."
Alex Neilson Investment Manager
Our team here at Investec Wealth & Investment will regularly review our strategic approach for managing all our investments. This means looking closely at each of our main assets and deciding if the balance continues to suit our clients’ needs.
Our review this month identified a need to broaden our clients’ overall exposure to risk, due to a number of economic uncertainties on the horizon, not least tentative moves being made by Central Banks across the world, rising inflation and the ongoing challenges of Brexit negotiations.
Our long-term projections remain positive but we have made a decision to diversify our selection of stocks and shares, which are currently heavily weighted in the UK. The theory being that by holding a broader selection of shares, losses in one market are more likely to be counterbalanced by gains in another.
We have also increased our investments in alternatives such as gold, and hedge funds across all our portfolios. As alternative investments do not tend to move in sync with the same market trends that impact stocks or bonds, they can counterbalance the risks associated with the stock market.
The risks are not significant at this stage, as the markets have generally performed well, but we are also aware of overriding themes and trends impacting investments across the world. The shift of economic power to Asia, for example continues to offer real potential for investors, but data coming from China also suggest there remain a number of risks worth keeping an eye on.
Finally we couldn’t finish this month’s market commentary without saying a few words about Bitcoin, which has dominated headlines and conversations for the past few weeks. Whilst we acknowledge the value of the underlying blockchain technology behind cryptocurrencies, we cannot consider Bitcoin to be an asset class, as it all still looks like speculative investing.
We’ll be back in January with a review of the year so make sure you subscribe to our newsletter to receive updates.
And from all of us here at Click & Invest, Have a Merry Christmas and a Happy New Year.