Why is it important for Reeves to manage your portfolio?
The past few months, Reeves have performed well against the FTSE index whilst the markets have been struggling. Due to the market conditions, many of our clients have been in touch with questions regarding their portfolio. Here are the four main questions we are being asked regarding the market conditions & how Reeves manage your portfolio.
What has happened?
Since January, the world and UK stock markets have fallen drastically, which has resulted in our clients seeing a fall in the valuation of their portfolio. However, over the last couple of weeks the markets seem to have recovered most of those losses, and now our clients will see their funds have recovered or even increased in valuation prior to the downfall.
Why has this happened?
The USA has seen an increase in interest rates, which is likely to follow in the UK as Mark Carney (the Bank of England Governor) states he expects to see an increase in UK interest rates. This is generally seen as bad news in short-term equity investments.
On top of that, we have also seen the fall in forecast of GDP that can be attributed to Brexit- although in the UK there are other factors contributing to this. For example, the reduction in productivity within certain manufacturers and closing down the worldwide quantitative easing program is major to the real equity valuations.
What are Reeves doing about this?
Reeves predicted this fall for some time, therefore we have maintained sizeable cash holdings and other relatively lower risk investments such as property. We have positioned our portfolios in a cautions way as we are expecting further losses. We are doing this by reducing equity holdings and encouraging some of our clients to temporarily reduce the risk of their profile.
What are Nigel's thoughts on this?
This is a worrying time for investors when they see their portfolios declining in value, however, our clients have seen marginal losses due to our highly diversified model portfolio.
We will continue to review and update our advice as we do in all market conditions. Don't worry, business as usual.