Congratulations to the polling companies on another stunning job well done!
As predicted in the run up to the vote, share prices and sterling both began trading sharply lower this morning following the vote to leave the EU. Prime Minister David Cameron is one of the early casualties, confirming his intention to step down in October.
Encouragingly, after a few â€˜fat fingerâ€™ trades across the market at very low levels, share prices have stabilized and (at time of writing) the FTSE100 index has halved its early losses to trade around 4% lower than last nightâ€™s close. This simply gives back the gains made over recent sessions, as the polls had predicted the UK would likely â€˜Remainâ€™. Sterling has also steadied, but already some of the UKâ€™s multi-nationals (potential beneficiaries of sterling weakness) are actually trading up on the day.
What are we doing for clients this morning? Apart from answering calls from the more nervous individuals and picking up some bargains for those day-traders looking to â€˜bottom-fishâ€™, actually very little. We do not favour knee jerk reactions and consequent rash decisions! The current turmoil would certainly not seem the time to begin doing so. Indeed, the current volatility highlights the benefits of the diversified, relatively defensive positioning that we generally adopt for our clients. We do not have all of your â€˜eggsâ€™ in any one â€˜basketâ€™ and are confident that the multi-asset approach that we utilise will weather the stormy market conditions that are set to prevail in the coming days and possibly months.
If, however, you still feel that you would like to discuss this weekâ€™s developments with your usual Caveâ€™s advisor please do not hesitate to get in touch.