In 2016, volatility increased and electorates became more unpredictable. Discover how to cope with volatility and find out what might be in store in 2017
Read This Excellent Volatility Report from FTAdviser, Compiled By Financial Journalists, Investment Managers, Independent Financial Advisers And Investment Strategists
A Short Video On The Definition Of Price Volatility
Volatility Is Likely To Be The New Normal
The following areas of volatility are discussed in detail in the Volatility Report:
Keeping A Cool Head In Volatile Markets
Are Markets About To Shift Gear?
Why Past Dividends Are No Guide To The Future
Why Chasing High Yields Can Lead To Danger
Who’s Afraid Of The Return Of Volatility?
Investing In Uncertain Times
Managing Clients' Portfolios Amid Volatility
Looking Beyond The Traditional Paradigm
Introduction To The Volatility Report
The past year has been noted on the political scene for its upsets and consequent volatility.
Markets were taken by surprise by Brexit. Similarly, earlier this month, Donald Trump surprised the pollsters yet again by winning the US election, even though, the pollsters may argue, he did not get the popular vote.
Over the past 11 months, investors began to realise that volatility is becoming all too real and normal as a prospect sterling crashed through floor shortly after the EU Referendum, and gilt yields plunged as more investors looked for safe havens.
With the unexpected becoming the new normal, some investors are in a state of panic. What will happen next year in the French elections? Marine LePen is hoping her chances have strengthened on the back of the wave of resurgent populism.
The problem is that as the politics became more unpredictable, investors worry that this makes economies, and future prosperity, unpredictable. But this equation is by no means certain.
As experts point out, if you had invested a small amount of money throughout the past 50 years, you would still be sitting on a sizeable investment, despite several stock market crashes, recessions and sovereign debt defaults.
The usual rules of investing for the long term and building a balanced portfolio have come into play. It is during times of uncertainty that it pays to have an investment manager or financial adviser with a few grey hairs who has seen uncertain times at least once before.
There are also opportunities; some are even saying that we will see a revival in the American economy on the back of the Mr Trump’s economic policies of tax cuts and infrastructure investment. Whether this is sustainable over the long term is open to question.
But now might be the time to consider other options, such as infrastructure as a form of investment, which has struggled to gain mainstream acceptance, or other alternatives, such as private equity.
It may make for politically interesting times, but for investment professionals, the political changes are a time for holding one’s nerve and waiting for new opportunities to emerge.
Read the full report on volatility.
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