Making a prediction and calculating risk are common features of investment planning. The next big challenge to take into account is of course Brexit. The effect of Brexit is not an easy one to conclude. For investors the divorce from the EU maybe overshadowing all other investment planning issues. The June referendum that brought about Brexit triggered the Bank of England to cut interest rates to protect the economy. However predictions did not unfold the way they could have, for instance it was suggested that markets and the pound would collapse. Conversely the British economy surged ahead with record highs in both the FTSE100 and FTSE250. Whilst in fact the pound has weakened, this has made UK exports increasingly appealing to the rest of the world which could benefit the UK economy further. Savings rates and the stock market do not move at the same rate, so may take a while to respond to a positive upturn in the economy. Therefore diversification may be even more important to help protect our investments, as we find out more about the markets as Brexit continues.
