CAIS 2017: POST-BREXIT TACTICS

Undeniably one of the biggest questions in the financial realm nowadays is the controversial departure of UK from the EU and unexpected success of Trump's presidential bid. Considering the UK's central role in the market, investors are increasingly wary of what their next moves should be and how they will best position their portfolio for the coming years.

As part of the Cayman Alternative Investment Summit, a panel of experts have given light to many of the questions plaguing the minds of many at present.

Erratic Outlook

The two aforementioned big events that took place last year has largely disrupted the markets, creating more questions for 2017.

According to one panelist, this will be the most volatile period since WWII--a remark that garnered majority of the approvals from his colleagues. This is given political trends shaping market movements. One also discussed the difference of situations in the US and UK, wherein the former has citizens feeling restrained and unappreciated and the latter has people valuing identity so much to the point of being willing to risk their wealth. This has caused a remarkable change in mindset and behavior of individuals across various countries.

Britain and EU projections

A specialist commented the referendum is not as bad as it seems in medium-term, as he believes it will leave the country with more options given the increase in freedom, allowing businesses to participate in new environment.

Despite this, it is predicted that 10% of their GDP will be lost--a figure which is the same as what they could have obtained had they stayed in the union. People are also expected to rally against political authority. Moreover, globalization is widely expected, assisted by technological advancements that makes it easier and faster for countries.

There was another idea as well, stating the alteration of the public's perspective is due to the rise of technology itself, which allows them to connect with each other and become active. It was mentioned as well that UK may not be the last country to leave the bloc, while citing that integration needs to be higher for a single currency than those in cooperation with the EU.

Gauging political risk

All experts acknowledged the difficulty of predicting risks, especially since markets are extremely sensitive to news and statements by government leaders. Hence, analyzing sentiments can often lead to misinformation, because this factor, which is not quantifiable, is being tried to be measured in a specific way. Overall, it states that uncertainty is mounting globally and there is a high chance of another 'big event' that may occur, although they do not have an idea of the catalyst yet. This is also a call for investors to be careful of their decisions.

Recommended investments

Since this is dubbed as the year of uncertainty, experts strongly advise to dwell on the side of commodity-linked equities, as they see a positive outlook for things such as gold and base metals. However, some are saying it will be better to short the market to hedge against unpredictability.