Resource Search

Heading down the backstretch of 2016, the status quo brings to mind the title of the old comedy routine “Everything You Know is Wrong.” It seems that the capital markets have adopted their own version of augmented reality in a topsy-turvy year. Bouts of volatility are likely in the second half, and risks appear elevated in a world of slowing growth, structural cracks and political fissures. Five topics of note contain further views on Brexit, the election, and surprising market trends.

One of the main components of investment management is an Investment Policy Statement (the IPS) that serves as a strategic guide to the planning and implementation of an investment program. It is a road map that defines roles and responsibilities and lays out directives for keeping investments aligned with a stated purpose. A good IPS includes several key components, customized to each individual, family or institution. It’s simple enough, yet often overlooked.

For the fourth consecutive quarter, financial markets suffered a bout of sudden and dramatic volatility. This time it was the Brexit vote which triggered negative market reaction. After the UK's surprising election results were announced on June 24, global equity markets sold off, the British Pound fell to a 30-year low, and worries re-emerged over the health of various European banks and the EU itself. Financial markets quickly absorbed the surprise outcome of the U.K.

Families are often overwhelmed by the complexity and sense of burden that comes with managing all the component parts of wealth across generations. More concerning, though, is the lost opportunities and the loss of capital that results from not getting it right. But owning and managing significant wealth does not have to be difficult, and learning from the ten most common mistakes that a family office investor makes can help the process become easier.

The United Kingdom's Brexit vote was shocking but not surprising. Polling prior to the vote consistently showed a close contest, with "Leave" often in the lead. The Brexit outcome created uncertainty for the financial outlook and markets. Some broad themes have emerged since the vote and may carry over to other markets. Learn more about what investors need to know on the impacts of Brexit.

At times of high uncertainty, the dissemination of information can create more confusion than clarity. The downside of today’s media model has been on prominent display in the days since voters in the United Kingdom cast their Brexit vote, expressing a wish to depart the European Union. In the aftermath, analysts began to project a wide range of separations occurring within regions and countries. It was as if the map of Europe were heading back to its standing of 400 years ago.

On a timely visit to London following the United Kingdom's vote to exit the European Union, the Pitcairn team had the opportunity to interview Wigmore Association partner, Marc Hendriks, Chief Investment Officer of Sandaire Investment Officer about what Brexit could mean to global investors. Marc provided thoughts on the following:

The UK has voted to leave the European Union after 40 years of membership, defying the expectations of most market participants and ignoring the warnings from the International Monetary Fund and other leading economists regarding the negative impacts on trade. Market reaction was swift, with the pound falling to a 30-year lows and a “risk-off” trade rippling across the global markets. While the UK leave vote (“Brexit”) has generated volatility and a flight to safety trade in the short term, it has not altered our longer term outlook on global markets.

The United Kingdom’s (UK) voluntary exit from the European Union (EU) is unprecedented—and with it comes more questions than answers about how it will affect business entities in the UK and beyond. Economists anticipate at least several years of uncertainty, which typically does not bode well for financial markets. U.S. companies that sell to, buy from, or operate in the UK or EU, or are engaged in their financial or stock markets, are likely to experience some financial effects—but the nature and extent of those effects is still to be determined.