Investing In Uncertain Times

After a year which saw Leave and Trump defy the polls - and conventional voting patterns - to claim victory, many investors have questions and concerns about what all this political upheaval means for their investment strategy.

The first and biggest question is whether it fundamentally changes the arguments for investing in the first place. History would suggest not. 'Risk assets', such as stocks and shares, are by their nature volatile. The reward for this risk has, over time, come in the form of a 'risk premium', which is the return in excess of that from a risk free asset (say, short term gilts).

Over the very long term this has certainly been borne out by the numbers. The risk premium varies across markets and time periods but, since the mid-1970s, is generally considered to have been between 3.5% and 5.5%.