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24 June, 2016

Walden Capital’s response to the UK vote to leave the EU

As you will know, yesterday the UK voted on what may well have been the most important question for the British electorate in generations.

By a narrow, but decisive margin the UK has chosen to leave the European Union. As a consequence of this we are now in uncharted terrority, and with reports of 10% plus swings against both currency and stock prices you may be worried about your investments.

Whilst there will be short term volatility, and indeed the UK may grow more slowly outside the European Union for the long term, Walden Capital portfolios have always been built with a strong global component.

We do not believe that it is appropriate to panic, or change direction because of this vote for two reasons; the first is that with a global bias not all impacts on our portfolios are negative, and the second is that it is impossible to know future market movements. Both experience and academic research tell us that sudden changes of investment direction rarely result in good outcomes for investors. In short, panic driven change will usually cost you more than doing nothing.

Whilst the urge to switch direction in pursuit of short term 'tactical advantage' is strong, by the time the landscape is clear the market has already moved, and the opportunity to profit from such situations has gone.

If you would like to speak to us please do call, but please be reassured that Walden Capital remains well placed to capture future positive long term market returns on your behalf, and short term movements are exactly that, short term.

by John Stirling


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