Advisers are urging clients to stay the course in the face of Donald Trump’s presidential victory, despite fears markets will continue to dive on the news.
A poll by Opinium suggests that four out of five UK financial advisers predicted a Trump win would damage investments ahead of the vote. Only four per cent thought a Trump win would positively impacting markets.
Postcard Planning director Rohan Sivajoti says he will carry on long-term planning for clients, none of whom are in stocks and share portfolios for less than five years, even if equities slide further.
He says: “When you can see big events coming its best to prepare clients. Yesterday morning we sent them an email referencing the principles of why we do what we do and not to focus too much on these events.
“It shouldn’t effect your goals; you have to focus on what you can control rather than other elements. It was a very British message of keep calm and carry on. These things come in cycles, its that old adage of time in the market, not timing the market.”
Bracing for the Trump dump https://t.co/gKCSwNcYVI
Our client email this morning pic.twitter.com/3mB14XlX0l
— Martin Bamford (@martinbamford) November 9, 2016
Satis Asset Management director David Hearne’s firm specialises in US ex-pat clients, accounting for a “significant proportion” of its client base.
Hearne agrees advisers need to keep their long-term focus.
He says: “The plan is the same as yesterday. File your taxes on time and manage wealth for the long term.”
Neither Trump nor Clinton had any proposed policies for pensions and ageing population. Will be intersting to watch.
— Ros Altmann (@rosaltmann) November 9, 2016
Sense Financial Solutions planner Steve Buttercase will be reviewing his client’s portoflios in light of market volatility, but is still not expecting any major changes.
He says: “There’s going to be some volatility in the next few days, particularly in the currency markets. It’s a seismic event. You have to review your portfolios, you just have to.”
“By the time that gets to the client stage that might take a little longer. We’re not calling the market, that’s a dangerous thing to do, but taking a sensible, balanced approach on how you view risk profiling.”
“The best thing IFAs can do is get their history books out and look for patterns. They may have to go back to the Roman Empire, but still.”
The echo chamber of modern media is designed to fill your brains with only disaster or celebrity. Seek wise council from a caring adviser.
— TheVoyantist.com (@thevoyantist) November 9, 2016
Nutmeg chief investment officer Shaun Port says the online investment manager has rebalanced to hold more defensive assets like gold, cash and long-dated UK government bonds, and has hedged nearly half its dollar exposure to protect against a fall in the currency.
Port predicts emerging markets were likely to be significantly impacted by the election result with the Mexican Peso already declining 8 per cent.
He says: “The sell-off in equities is not surprising - at this stage it's to be expected. Markets hate uncertainty, and compared to many US presidential candidates, Trump has not been precise about many of the policies he intends to pursue as President. The fact that Trump will not be confronting a Democratic Congress only adds to investors’ fears.”
Port says US equities could be a safe haven for investors: “We often see the US market fall less than other world markets in times of crisis. We don't think the US equity markets' safe haven status is threatened by Trump, largely because the damage is more likely on a global level.”