Business

Think carefully before jumping on the fastest train

Chancellor Philip Hammond has warned people to "buckle up for the Brexit rollercoaster"
Chancellor Philip Hammond has warned people to "buckle up for the Brexit rollercoaster" Chancellor Philip Hammond has warned people to "buckle up for the Brexit rollercoaster"

AFTER sterling fell to its lowest level against the dollar following news that Theresa May will start the Brexit process in March, how worried should we be about our investments?

As someone used to say, there is no such thing as good news or bad news, only news. Whether it’s good or bad is down to your interpretation.

If you’re planning on going on holiday and were just about to buy your foreign currency, then you may think the news that the pound has fallen to its lowest level against the dollar since 1985 is not that great.

Added to that the FTSE 100, buoyed by a falling pound, rose, but has, at the time of writing, dipped as a result of the ‘Hard Brexit’ announcement.

However, despite the fact that Chancellor Philip Hammond has warned people to buckle up for the Brexit rollercoaster, it’s worth taking a step back and thinking long-term.

After the referendum result we knew that Article 50 was going to be triggered, it was just a case of when. This did cause some uncertainty at the time, but at least now, after the Prime Minister’s announcement, we have a timetable to work towards.

And while this caused an impact, there were statements from the Conservative party conference that at least should provide a catalyst to certain areas of the market.

It appears that the new Chancellor has ditched his predecessor’s policies on austerity and cutting the deficit by announcing plans to inject money into housing and infrastructure.

During his speech at the conference, Hammond unveiled plans for a £2 billion pot to support ‘accelerated construction’ on brownfield sites and £3 billion Home Building Fund to provide loans to stimulate projects.

Ronan Marrion, mortgage adviser for Worldwide Financial Planning said: “People still see houses as a solid investment, especially in the more affluent areas such as London and the South East where property portfolios are performing very well.”

“Whilst building new homes looks like a proactive step to help the housing shortage, it often doesn’t translate into solving the problem of affordability for first time buyers.”

Hammond also announced plans for a £500 billion investment in infrastructure, particularly for road and rail.

Infrastructure focused investment funds could be primed to take advantage of this boost in spending, however, they come with certain risks attached, so advice should be sought before any wholesale changes to your portfolio.

It will be interesting to see if the £1.8 billion First State Global Listed Infrastructure Fund increases its exposure to UK holdings from the current 6.5 per cent on the back of Mr Hammond’s announcement.

There are lots of questions that need to be answered about what you as an investor want to achieve. Such as your attitude towards risk, how long you want to invest and whether you are targeting a growth or income based strategy.

There are opportunities for all out there but it’s more important than ever to think carefully and speak to an IFA before jumping on the fastest train.

:: Darren McKeever (dmckeever@wwfp.net) is Northern Ireland adviser of Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. For a free, no obligation initial chat about your individual finances, call 028 6863 2692, email info@wwfp.net or click on www.wwfp.net. Follow us on Twitter: @WorldwideFP.