Monday 4 July 2016, Independence Day, the day MoneyFarm is able to accept US Citizens. We are excited to be able to throw our doors open to all of the US Citizens residing in the UK. However 2016 is the year of political uncertainty and market volatility so how do UK residents, American or not, protect their wealth?
The Trump tornado
A US Election always brings a degree of market volatility with it. Markets do not like anything unpredictable and as the world’s largest economy, the will of the American people sparks a great deal of unpredictability.
But this year is more unpredictable than usual and that is because Donald Trump is the Republican candidate for the vote in November. It has been reported that ‘Trump represents a nightmare for investors’. His statements do not fit neatly into any sort of ideology we have seen before from the US leadership. What is clear is that he has a relentless focus on making ‘America great’, how he will do this is unclear but indicators point to an isolation of the US from the rest of the world.
Slippery oil prices
In February oil hit $28 a barrel, today it is just under $50 a barrel and the volatility of the oil price is set to continue this year. The EU Referendum result has not helped with the volatility, but once the dust settles on that, it remains to be seen whether or not the market will have rebalanced between supply and demand. Some pundits are anticipating a larger than expected supply deficit by the end of the year which could see the price go back up to $70 a barrel.
The UK’s vote to leave the European Union has created market volatility not seen for years. On the Friday that the result was announced the FTSE 100 was down to levels of 2008. Today it has largely recovered to levels pre BREXIT but there are other markets that a still suffering.
What all these events tell us is that, US Citizen or not, investors need to diversify their investments both in terms of currency and market exposure. With the next market uncertainty coming from the US Election, US Citizens want to ensure their investments are exposed to other territories and currencies.