Time for a Cautious Adventure?
At Reeves Independent we constantly monitor the state of the markets and we advise clients accordingly when we think their interests are best served by an adjustment to their investments.
We tell them what changes are necessary to anticipate or react to market changes as appropriate, given the level of risk they are comfortable with. Not every IFA does this.
As we announced earlier in the year, Reeves Independent now has a range of core portfolios designed for those who don't want to make frequent investment decisions based on market fluctuations. These are appropriate for those who want to take a long term view of investments and make annual adjustments. The other portfolios are tactical portfolios which are regularly adjusted.
Several months ago, we took the view that markets were in for a fall. Over summer the world's markets had chalked up the longest bull-run on record and that couldn't go on indefinitely. Add to that, a toxic combination of Brexit uncertainty, the threat of a trade war between US and China and global economic slowdown, and we advised a safety first policy. Accordingly, we recommended clients who had an adventurous attitude to risk to adopt a balanced or even cautious approach. Some even opted for 100% cash holdings. Such decisions were a product of the clients' views, the size of their portfolios, individual circumstances and our recommendations.
The markets did fall, vindicating this cautious approach. The FTSE 100, for example, which was at 7877 last May, dropped as low as 6600 in January this year. However, while many of those factors causing uncertainty have no means all been resolved, we have been reviewing our portfolios and asking clients who chose to be more cautious whether they want to move back into an adventurous portfolio.
Why are we doing this?
We believe that certain markets such as the UK and Japan offer better long term value at the present time compared to other equity markets. Despite the challenging backdrop we are also aiming to plot a steady course for the rest of this year, with a focus on taking advantage of entry point opportunities with a medium to longer term view in mind.
We believe that there has indeed been a fairly sharp recovery in early 2019, this could prove to be a temporary respite and a possible prelude to further increased levels of volatility in the market. The Adventurous Tactical portfolio is therefore thoughtfully positioned with diversified holdings in Equities, Bonds, Cash and Property. Because of it's nature, we retain exposure to areas of global structural opportunity such as Technology and Healthcare.
The FCA policy is that clients should be invested at the level of their attitude to risk. If you feel that yours has changed and doesn't reflect your current outlook, you can review it here if you are an existing client.
Pensions and retirement plans should be constantly reviewed, both by clients and by their advisers. At Reeves Independent, we work hard to ensure we work in partnership with you to safeguard your savings.
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It is important that no actions should be taken without first taking advice. Personal circumstances and an individual's appetite for risk means that the advice for one person may not be the same for everyone. The information in this blog or any response to comments should not be regarded as financial advice. Reeves do not advise on Defined Benefit pension schemes. Reeves do introduce a third party specialists in areas of work we do not cover.