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To Brexit or not to Brexit, that is the question

And what of the recovery? Well, the jury/prophets are still out on determining what will be the next cog to fall off the UK wheel of fortune. Will it be Scotland diving into the coffers of the ECB vaults to fill its sporran with €€€€€€? Or will it be our “special friend”, the USA, stripping our 51st state status, knocking at number 10 to get to the end of the queue so that USA and EU get on with signing a Free Trade Agreement? Will England finally be the little island sailing on Britannia waves with its head kicked off to wonder off into oblivion with it’s much cherished devalued £££?

Assimilating such a scenario gave rise to an acute headache and whilst the above doomsday scenario is most unlikely to happen, not all the pundits have shown their hand. The mere thought sent a cold shiver down my spine because the FTSE100 is far more than an index. The FTSE100 Company represents circa 81% of the entire market capitalisation of the London Stock Exchange (market cap over 2 trillion) and is by far the most widely used stock market indicator. More pertinently the FTSE100 is unequivocally the barometer of the overall UK economy. Therefore, an out scenario would send shock waves far beyond the shores of our little island and would not resonate too favourably with our trading partners. 

Tumultuous debacle 

Many decades ago a detachment from mainland Europe would cause an upheaval but wouldn’t be unsurmountable. The ties with our cousins across the ocean and the Commonwealth were at their pinnacle. The USA alone, many years ago, was home to 60% of our exports. Some of our industrial conglomerates, such as The Hanson Trust, forged great alliances with the USA.  Today the scenario has changed, with mainland Europe now accounting for 60% of our exports. With little over two months until the Brexit vote, what should we do with our investments? This is the question I get asked most these days. My answer is similar to the old estate agent answer to everything “location, location, location”, and mine is “diversify, diversify, diversify”.

The business world is indeed intertwined but the financial world has a peculiar difference, its speed of change is like no other industry, its works at ‘keyboard speed”. If the outcome on the 23rd of June is to leave Europe, on the 24th traders will hit the “sell key” and in seconds vast fortunes of people’s hard earned money will be wiped of the face of the map, or not!  

 

Other News

QROPS and Brexit negotiations

FlagsExpats living in Gilbraltar who currently enjoying the benefits of a QROPS will be pleased to hear that the Chief Minister of Gibraltar, Fabian Picardo, has said that the impending Brexit negotiations are an opportunity for the Rock to seize the moment and to ensure that the future is something it can “write for itself”.

The Chief Minister, making a statement in the days leading up to the first session of Parliament, said that it was important not to become bogged down in the contentious “in, out” arguments that marred so much of the pre-referendum campaigning. Rather, said the Chief Minister, those involved in discussions should focus on achieving positive outcomes so that Gibraltar can continue to be heavily engaged with the European Union.

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The Four Pillars of Wealth Management

Wealth management is a deeply personal, long term process that will differ from person to person depending on their circumstances and goals. Whilst it is imperative to take this into consideration when developing a strategy to achieve financial objectives, there are four main concepts that are applicable to almost all financial planning journeys and are […]

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