The U.K. referendum on EU membership has ushered in a period of uncertainty and political instability, primarily in the U.K. but also in the eurozone. As a result, we have downgraded our outlook for international developed equities.
After taking a hit in 2015, diversification proved its worth again in the first half of 2016. But a closer look at the catalysts for the recent success reminds us that the benefits of diversification have limits — and analysis of today’s market conditions suggests that investors should resist the urge to become complacent in their diversification strategy.
Investors hungry for income are naturally attracted to investments that offer higher than average dividend yields. However, with dividend cuts on the rise it’s risky to reach for yield without paying attention to the quality of dividends and the health of the businesses behind them. This article takes a closer look at what happens inside companies that eventually cut their dividends and how investors can avoid getting caught off guard.
As the financial markets adjust to the aftershocks of the historic U.K. referendum vote, spectators aren’t the only ones left scratching their heads. After the referendum, financial markets have begun to adjust, moving beyond the initial emotional response. So, as the dust begins to settle, many are left asking, “Now what?”