Is it time to reduce your risk?

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You may regard the bookmakers as a strange source of research for an adviser to base an opinion but unlike most of the agenda based advice we hear and read it is the bookmaker who has a vested financial interest to get it right!

The bookmakers are rarely wrong when it comes to events like this and the statistic above, taken from odds on the 16th April, suggest very firmly that we stay.

The Polls are a little tighter, some suggesting that it is as tight as 40-40 with 20% undecided. The bookmakers are clearly relying on human behaviour that those undecided will usually air on the side of caution when the time comes to vote.

There will be certain celebrity TV “economists” who will be very keen to declare that the end is nigh and we should all be running for the hills but of course the reality is that regardless of the outcome we will all survive.

If as the bookmakers suggest we remain in the EU, it is expected that the markets will react favourably.

The portfolio’s we build at Pryor Portfolio Management embrace volatility for the long term investor but of course you must be able to stomach the ride.

If we leave the EU then it will certainly be a ride to remember/forget! The short term will be particularly volatile and the predicted recession could certainly be a reality with job loss a real possibility ,but it must also remembered that out of threat comes opportunity. in 2006 the EU had a 30% share of the world GDP statistics in 2015 revealed this had reduced to 22% (source IMF). UK PLC will need to keep finding new markets in the emerging world.

But the key is that if we leave the EU it could be quite a long time before we see any growth in the markets or recovery against the immediate losses you could suffer if that is the outcome of this referendum.

If your investment horizon is a short term one; Retirement in the next 12 months or an investment/savings plan earmarked for an event over a similar time frame then it would certainly be worth talking to an adviser to ensure your risk profile is one you are comfortable with in preparation for June 23rd.

If you benefit from actively managed diverse investment funds such as those offered by Pryor Portfolio Management and your horizons are longer term then we would suggest that there is nothing you need to do because trying to time a market simply for an edge on gains can go horribly wrong. That said regularly revisiting your current risk profile is always advisable.

If you would like to have a meeting about the risk of your investment and retirement portfolio’s then please get in touch, details below.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

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