As I pen this post, it is roughly 9 am on Friday 18th February and the UK is preparing for Storm Eunice to arrive.
Already, the trains are totally out of operation on some lines and severely disrupted on others. Advice in many parts of the country is to ‘stay at home’ – now where have we heard that before?
This is just another reminder of how unpredictable life can be. Only 6 or so weeks ago, at the turn of the year, you might have said that things were settling down. The Omicron wave seemed to be receding, things looked relatively stable (or as stable as they can be) on the geopolitical stage and financial markets were topping all-time records!
Fast forward to the present day and we have increased tensions between Russia and Ukraine, inflation running at a 30-year high, central banks around the world increasing interest rates faster and higher than thought possible only a month or two ago, a Prime Minister whose position looks at least a little shaky and some global markets now officially in ‘correction’ territory!
It is fair to say a storm is coming, both literally and figuratively!
However, I would suggest that the real storm (Eunice) is far more dangerous than the figurative one. Although global markets are somewhat volatile at the moment, this is something we have seen before, time and time again!
The media always over-hype the bad news flow around the markets, with barely a mention (if a mention at all) of equivalent good news.
In portfolios, we are positioned in some ways as you would be for the storm. We have made some changes to allocations to take into account the current inflation and interest rate outlook and are on a slightly defensive footing. We are prepared for, but not panicked by, what is to come.
The good news is that, like all storms, this too shall pass – it is just a matter of time.
In the meantime, stay safe and stay at home (I really didn’t think I would finish a blog post with that statement again so soon!).
