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Brexit predictions, what’s our view?

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You won’t be surprised when we say that we are agnostic about what will happen to your investments after Brexit. That is to say, we don’t know. Nevertheless, here are some possible outcomes:

  1. The UK economy falters
    This would probably mean that the stockmarket would be affected but only to the extent that the companies it represents are reliant on the UK economy (many companies do significant amounts of business internationally).
    Interest rates would be kept low, thus borrowers would benefit and savers would earn very little on their deposits.
  2. The UK economy roars ahead
    This would probably mean that the stockmarket would be affected but only to the extent that the companies it represents are reliant on the UK economy (many companies do significant amounts of business internationally).
    Interest rates would probably rise gently so borrowers would pay more and savers would begin to earn a little more. Lower risk investors, with a higher exposure to bonds and gilts, would see that portion of their investments lag behind whilst the smaller portion invested in shares would grow faster.
  3. The Pound slumps in value
    Exporting companies will do better and importing companies will do worse.
  4. The Pound gains in value
    Importing companies will do better and exporting companies will do worse.
  5. Many international markets fall over a long period of time.
    Most investments would see lower returns and some may fall in value for a while. Interest rates may be kept low so borrowers would benefit and savers will earn very little on their deposits.

There are many other possible permutations post Brexit and we would advise against trying to plot a particular path through the confusion. The portfolios we use are widely diversified – across classes of investment, across national boundaries, across sectors of the economy and, to a modest extent, across currencies. This is the best defence against unpredictable economic events. We are confident that whatever happens concerning Brexit the day will come when your investments are worth more than they are today.

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