Nearly 2 years on since the UK voted to leave the European Union, businesses are still reporting high levels of concern, anxiety, and uncertainty at how this decision will affect their profits and how they will need to adapt. Although how the negotiations will play out remains to be seen, there are plenty of options for those with both large and small business portfolios wishing to “Brexit-proof” their assets against any potential issues that may arise as the UK gets closer to exit day. The UK has been and will remain one of the financial capitals of the world regardless of how the next couple of years play out and it still ranks among the highest in the world for ease of doing business and asset security. Regardless of how big your portfolio is or what kind of assets you might deal in, here’s how you can protect yourself from Brexit-related uncertainty.
This one might seem like one of the most obvious tips, especially for those with particularly small or highly specialized business portfolios. However, there’s plenty of simple and lucrative opportunities to diversify in order to spread yourself out as widely as possible and to ring-fence yourself against any possible future disruptions. Although the domestic market should not be overlooked (more on that below), you should always keep your eye out for overseas opportunities for investment that are less likely to be affected by current political developments.
The European-wide market for investment opportunities remains large, with Poland, France and Germany especially all having taken an active role recently in encouraging investment from British businesses and investors. The climate for investment in both SMEs and larger businesses across the EU27 is probably more welcoming that it has ever been, as governments across the continent compete to attract British money and businesses.
You should also look to diversify in a domestic context, which is always a good strategy regardless of where your business interests lie. If your portfolio is highly specialized and catered to just one sector or industry, then you’ll always be exposed to dips and dives in the market, and any disruption is more likely to hit your assets harder, regardless of the context. Now is a better time than ever to spread yourself out as widely as possible, and to explore new sectors and areas which may previously have interested you. The more diverse your portfolio, the more protected you are.
Embrace the bull
It’s no secret at the moment that the UK and much of the global economy is going through a bull market, the likes of which we haven’t seen in a very long time. The stock market continues to hit record high month on month, with the British FTSE100 doing particularly well in spite of recent events. Although you should always, of course, beware the bear, as what comes up eventually tends to come down, you should take advantage of current stock market conditions to boost your portfolio as much as possible.
On top of that, the UK has one of the freest and best-protected financial sectors in the world, with regulations continuing to improve, so keeping your eyes and ears open to trading opportunities in the UK is always going to be a smart move. The British capital London continues to be the financial center of the entire planet, meaning that British-based investors and business people are better placed than most to extract maximum value out of what are currently some incredibly favorable trading conditions. Whether this will change much in the future remains to be seen but, for the moment, there hasn’t been a better time to invest in the UK financial market.
Embrace merging domestic markets
As previously mentioned, it would be foolish to discount the many domestic investment opportunities in spite of current uncertainties. There are a number of promising UK growth sectors that themselves seem already well-protected against any Brexit-related disruptions. For example, investing in domestic house-building companies has been championed as a sound investment by a range of economic forecasters, given the high levels of demand that show little sign of dissipating. Recent government initiatives have also raised the market capitalization of the sector significantly. For instance, the recent Help to Buy initiatives have raised the value of the biggest housebuilding companies by billions in just a few months.
You should also look further afield to newer, emerging sectors of the domestic economy. Gaming is one that is showing significant promise as a high-growth area in the UK, and the industry has little reliance on EU supply chains or capital flows. Also look into the domestic energy market, in particular, ones that are attracting a greater share of overall investment, such as renewables and nuclear.
Although the current political climate in the UK is understandably making investors a little jittery, it’s clear that there are plenty of steps to take to ensure your portfolio is as protected as possible.
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