Introduction
The Elephant in the Room
We tend to avoid political commentary, but recent developments, particularly within the US administration, have undeniably contributed to the volatility we’re seeing in global markets. It’s a reminder that headlines can stir up uncertainty, but long-term investors need not be alarmed.
Stock markets are not Economies (and vice versa)
This is a point we’ve returned to often in past newsletters, and it’s more relevant now than ever. Markets can respond rapidly (and sometimes irrationally) to political or economic news, while the broader economic fundamentals move at a different pace.
A Time for Perspective, Not Panic
There’s no denying it: we’re in turbulent times. No asset class is entirely risk-free—not cash, bonds, property, gold, or cryptocurrencies. But history shows us something critically important: markets are resilient.
During periods of uncertainty, the most important thing to do is not to panic. Tune out the noise, stay calm and disciplined, and remember why you invested in the first place.
The Power of Global Diversification
A globally diversified portfolio, spanning thousands of companies across dozens of countries, remains the best foundation for long-term growth. While economies or governments can falter, the collective engine of global enterprise continues to drive forward.
To put it in perspective:
Since 1900, global stock markets have navigated and survived:
- Two world wars.
- Two global pandemics.
- Dozens of regional conflicts and political upheavals.
- Numerous financial crashes and crises: the Wall Street Crash, the Great Depression, the 1970s oil crisis, Black Monday, the Dot-Com bubble, and the 2008 financial crisis.
Markets have also endured the rule of figures like Hitler, Stalin, Mao, and many others. They will weather today's leaders and tomorrow’s challenges, too.
How We Support You
Our team is here to guide you through challenges like this. If you’re feeling uncertain or would simply value a conversation about your strategy, we encourage you to get in touch. Your long-term goals remain our priority, and we’re here to help ensure your portfolio continues to support them.
We look forward to helping you navigate whatever comes next with clarity and confidence.
* This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action based on the contents of this publication. The Financial Conduct Authority does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. The newsletter represents our understanding of the law and HM Revenue & Customs practice as of December 2024.
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