What do Brexit, Trump and Russian poisonings all have in common?
No, not the mirarid of things that first come to mind. They are all having an effect on the Investment Markets. It’s the rise of political risk.
You can’t predict what the news will next feature, but chances are they will have an effect on a range of investments.
On July 23rd Amazon shares fell shortly after Trump sent a tweet stating Amazon was taking advantage of the US Postal Service and implied this would be coming to an end. link is provided for reference only, we are so much more interesting than Trump.
It wasn’t the first time Trump had affected Amazons share price. On 28th March 2018 they fell for a day and bounced back on the 29th. If one directed tweet can have this big an effect, imagine the possible outcome that will arise from changes to his steel tariffs and “trade wars” with US Allies.
It's not just a Trump issue
We can’t just be concerned with Trump though. Brexit is much closer to home and will have lasting effects for years to come. Putin, China and North Korea are the big names of unknown certainty and any action by each could have knock on effects and financial implications.
What advice is there for investing at this time?
When the future is uncertain it doesn't mean you stop investing. It just means you invest smart. Having a diverse range - portfolio - of investments is one way of attempting to protect your investments. If US equites drop, there may be a rise in EU Bonds. You could see a fall on part of your investments but others could see a rise. If gas falls, other renewable energy sources could rise.
What can I do now?
Whilst it may be tempting to block Trump on twitter and turn off the news, it is best to be aware of upcoming challenges for your money. Social media is instant and the market effects can be immediate. While this may be worrying, it's best to remember that your investments are based on long term growth and although short term changes will occur, your financial advisor should be on hand to guide you through the political turbulance.
The value of pension and investments and the income they produce can fall as well as rise. You may get back less than you invested