How to manage your financial risk throughout the Brexit process

Very few of us would’ve predicted that the UK population would vote to leave the EU. However, here we are over a year after the vote, and many of us are still unsure as to how it will affect the UK economy.

Whilst the Brexit proceedings have officially started and the ‘exit date’ is set, there is still an air of uncertainty surrounding the outcome. The UK is yet to reach a trade deal with the EU, which could lead to a future of market volatility, fluctuations in the value of the pound, higher interest rates and increased inflation.

It’s crucial that UK investors and business owners keep a watchful eye on the economy over the coming years and work towards implementing a risk management strategy. This can help you to protect your investments and ensure you are prepared for whatever Brexit has to throw at you.

If you’re looking for ways to protect your financial future, then look no further. Financial hedging advice from JCRA and other hedging experts, can help you manage your financial risk during the Brexit process.

Plan for the worst first

It’s fairly certain that market conditions will waver over the coming years. This could impact the pricing of imports and exports, the availability of goods, and could also trigger currency fluctuations.

This can pose significant risks for UK foreign direct investment. The revaluations in foreign assets as a result of the currency fluctuations could result in significant losses for investors. With this information in mind, it’s wise to keep a clear head and refrain from making any rash decisions.

As conditions are constantly changing, it’s best to keep long term investments in industries that are less likely to be influenced by significant changes in the UK economy. This can give you more control and protect your investment against short-term market changes.

Keep an eye on Brexit proceedings

This may seem like a no-brainer, however, the importance of keeping an eye on the Brexit process cannot be stressed enough.

If you remain in-the-know about the current status of Brexit, you can better prepare for the plans that are outlined.

To do this, it’s wise to create a ‘Brexit taskforce’. The members of this group have the sole responsibility of monitoring the wider economic climate, the current Brexit position and will then have the job of relaying the important information to investors and business officials.

This can help you to become more risk averse whilst also allowing you to spot any potential opportunities in the market.

Diversify your portfolio

Regularly reviewing your portfolio and assets is a crucial process for any investor. But whilst Brexit is underway, it might be worth considering spreading your investments over different areas.

Heavily investing in one area is always a big risk. Even in the rare events where the future looks almost certain, it’s a good idea to hedge your bets and diversify your portfolio early on.

Investing in a varied portfolio of different assets across different industry sectors is a great way reduce your risk and protect yourself in this ever-changing economic climate.

Speak to the professionals

Investment is not something that should be taken lightly and there can be significant financial consequences if you’re given poor or ill-informed advice. Working with risk management experts can help you to make the right decision based on your individual situation.