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Uncertainty = Volatility: Three Upcoming Political Events

| Investment | By Caroline Shaw

The markets have been volatile this year and political uncertainty is a contributory factor. It looks to be an interesting year, particularly for the UK and the US, though the impact of these events will be global.

  1. BREXIT? - the date is set for the EU referendum as 23rd June. Expect the “stay in” and the “get out” campaigns to step-up a gear as we get closer. We expect to “stay in” – membership of the EU is important for big businesses and the UK financial services industry as well as for Britain’s global standing.

  2. US Elections – not until November but the primaries are already underway and candidate selection remains uncertain though Trump is, unbelievably, a clear leader now in the Republican race. Much can change before November.

  3. UK Local Elections – will be held in May along with the London Mayoral election and should indicate whether Jeremy Corbyn’s Labour has support. If not, more division within the Labour Party will ensue.

Uncertainty leads to volatile markets and we are prepared for this. We constantly monitor our exposure to all asset classes to ensure we are best placed to take advantage of any opportunities. This includes purchasing protection for client portfolios, to smooth the ups and downs. This year has already been very successful for our options trading strategies.

Plenty of other issues persist and will continue to add to market volatility:

  • Brazil – shrinking economy, rising inflation, presidential impeachment attempts, corruptions – all this and hosting the Olympic and Paralympic Games with global health concerns over the Zika virus.
  • Ongoing Southern Europe migrant crisis.
  • North Korea flexing its nuclear capability muscles.
  • Islamic State group and its presence in Syria, Iraq, Afghanistan and more.

We will, as always, be ensuring that our client portfolios are carefully risk managed throughout these periods of market uncertainty.

Caroline Shaw CFA, MEng (Hons), Dip PFS, IMC, Chartered MCSI

Head of Fund & Asset Management

Warning – the views expressed by Courtiers in this summary and any video and video transcripts, are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this document, watching the featured video or reading the video transcript and investors are recommended to take independent professional advice before effecting transactions. The price of stocks, shares and funds, and the income from them, may fall as well as rise. Past performance is not necessarily a guide to future returns.

We do not endorse nor accept responsibility for the content of any website not operated by Courtiers which you may visit by following a link from this article.

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