Good Evening

So we have made it through the third day after the historic vote to leave Europe. The FTSE finished 200 points down on Friday and 156 points today but gained today by 158 points. We would have taken that at 6.00 Friday morning!

Unsurprisingly the pound has fallen to its lowest levels since 1985 and it is predicted that it will fall a further 10%.

We have been inundated with fund manager updates and comments and this is to be expected. It’s the usual blend of fear and opportunity from most of them but this merely reflects the history of big historic events that create the uncertainty. Some sectors over the last couple of days have been crushed, particularly
housebuilders, the airline industry and banks.

We have had a few managers of late telling us that the banks were now offering good value, well they must be a screaming buy then at the new lower levels?!

Many bonds looked poor value before and look even worse now and we will stick to our belief that whilst we need diversification we don’t want to buy expensive assets relative to history. Property will be interesting from here especially in the UK. As you are aware we had already dialled down the property holdings and UK in particular. This wasn’t due to Brexit per se it was due to where we mightbe in the cycle.

At the time of writing it is worth noting that all our model portfolios are up in value when comparing values last Monday and today.

Finally, we would also like to take this opportunity to point out that all the markets and economic concerns we had pre Brexit still exist and when these are resolved there will be some more to replace them. The good news is that we tend to underestimate human ingenuity and ability to work through our problems. In our opinion the EU has an opportunity to deal with the issues that have caused people in so many nations to turn away from them or at least to start asking the right questions but they will need to move uncharacteristically swiftly and it remains in all our interests that they succeed.

More to come as events unfold.

PORTFOLIO MANAGEMENT