DIY Investor Magazine
/
July 2016
4
In planning this latest edition of DIY Investor Magazine,
we were reckoning on uncertainty; whether we were
in or out, it seemed inevitable that virtually half of the
electorate would not have the result they wanted.
We decided to have a closer look at investment trusts
as a quintessential long-term investment proposition,
but when we set the theme of the issue as ‘keep calm
and carry on investing’ I’m not sure we realised just how
prescient that would prove.
The last four weeks has seen the biggest social and
political upheaval imaginable set against a backdrop
of momentous and monstrous acts perpetrated in
France and Turkey. The EU Referendum has exposed
fault lines between social classes and generations;
it has exposed the occasionally ugly consequences
of neglecting the voice of an increasingly frustrated
section of society; with four million lobbying for a
second chance it highlights the danger of what may
have been a protest vote and caused the younger
generation to cry foul when it was entirely within their
gift to engage with the process.
In four short weeks, we have seen seismic political
movements and no lack of sharp elbows; we have
a new cabinet, we have an opposition in disarray,
we have calls from Tim Farron for a new opposition
alliance party, Boris has left and come back, this
time Mr Farage actually seems to mean it, and Mr
Gove’s contribution to events was nothing less than
remarkable.
Predictably, markets initially tanked, the pound took a
battering and the doom-mongers’ forecast of financial
Armageddon felt momentarily, and scarily, possible.
Yet, above the mayhem bestrode Governor of the Bank
of England, Mark Carney, who gave a consummate
speech in order to steady the ship; a supporter of
Remain Mr Carney knew that the people had spoken
and that 24th June was the start of an entirely new
order with new relationships and new opportunities.
That there will be difficulties is without question as
the myriad laws and regulations are untangled and
KEEP CALM & CARRY
ON INVESTING
recreated; as future trading relations with Europe are
explored and agreed, as social division across the
continent is either addressed or foments.
There have already been tangible developments with
many commercial property funds effectively frozen
to prevent investors rushing for the exit in the face
of falling asset prices and those heading for the sun
will find that their beverage of choice comes with a
chunkier tariff due to the weaker pound.
In the compilation of this edition we have solicited the
thoughts of managers of some of the biggest funds in
the UK and two words stand out – ‘uncertainty’ and
‘opportunity’.
We constantly hear that markets don’t like uncertainty,
but then neither do individual investors working toward
their personal objectives; what is clear is that the
managers have been preparing their funds for either
eventuality and have a very clear view as to where
opportunities will arise.
With no timeframe yet agreed to invoke Article 50, what
appears certain is that uncertainty will persist for a
number of years, but most uncertainty is political rather
than a product of economic meltdown.
It is therefore it all the more important that investors
have the financial literacy and access to information
to allow them to make informed investment decisions
choices and at DIY Investor we welcome any feedback
you may have that will allow us to help you better -
In addition to a focus on investment trusts, we look at
AIM at 21 – the small-cap market has now raised more
than £100bn since 1995, we look at fixed income from
invoice financing and we give you some pointers as to
how it is possible to evaluate and select retail bonds.
