Financial Advice

The Impact on the Stock Market.

Not So Strong and Steady

 

June 2017


Following the surprise election result on the 9th you may have expected the stock market to fall, in fact the FTSE 100 closed up just over 1%. Generally markets do not react well to surprises but the fall in sterling, of around 2% against the dollar and euro, improved prospects for the larger UK companies who derive much of their earnings from overseas, and benefit when those earning are converted back to sterling.

The FTSE mid cap index which is comprised of more domestically focused companies did fall slightly during the day but it also closed very slightly up. We saw similar effects following the referendum last year.

Whilst there will undoubtedly be periods of volatility as the Brexit negotiations progress, many leading fund managers have welcomed the prospect of a softer more trade friendly Brexit rather than the hard Brexit proposed by Teresa May.

Recent events highlight the dangers in trying to second guess how markets might react, we have consistently recommended that clients remain invested throughout these unpredictable times, but the importance of diversification has never been greater.

As always good independent financial advice will help to reassure investors.

For more information please call 01473 408422 or email ifa@wmibl.co.uk.