Russ Mould, investment director at AJ Bell, believes: “The best course of action is probably to do as little as possible, to avoid incurring unnecessary fees and dealing costs, and to use their time more productively by stress-testing portfolios.
"This will make sure they are sufficiently well balanced and able to cater for a range of possible economic outcomes – growth or slowdown, inflation or deflation or even stagflation – given the deceptively patchy nature of recent economic data on both sides of the Atlantic.”
Going for gold
One asset class which investors often flock to during times of heightened uncertainty is gold, which is uncorrelated to equities and bonds, thereby acting as a ‘safe haven’.
The Pure Gold Company reported a 76 per cent increase in demand for the asset between the general election on 8 June and 14 June, with 36 per cent coming from the same people who purchased gold in the wake of the referendum result last June.
Josh Saul, chief executive at The Pure Gold Company, acknowledges: “The gold price is still 15 per cent cheaper than its peak in 2012 and many would argue that the fundamentals that support gold are stronger today than they have been for many years.
“Many of our clients believe that a hung parliament and a divided nation will make it more difficult for the UK to negotiate effective trade deals with the rest of the world, which will impact the already fragile economy.
"They are motivated to purchase gold not merely to grow their portfolio but to protect and preserve their wealth against further unforeseen and unprecedented market forces.”
Adrian Lowcock, investment director at Architas, observes: “Gold is the main metal which investors use as a defensive asset class, the vast majority is either used for investment as a store of wealth or for jewellery.
“Gold still holds an allure for investors and is still seen as a good diversifier for investors, typically I would suggest investors have around 5 per cent in their portfolio.”
Those with an allocation to gold will be pleased to hear it has returned 15 per cent in the past 12 months in sterling terms, most of which is due to the fall in the pound following the Brexit vote, according to Mr Lowcock.
As is so often the case with investment, it all comes down to diversification, whether that’s across asset classes, regions or currencies.
David Carroll, head of strategy at Seven Investment Management suggests: “It isn’t just equity and asset class diversification that is important, but country risk too.
"Many investors would not dream of putting 80 per cent of their portfolios in an India fund, but we would argue that the same caution should also be applied to any single country.
