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The UK general election last week left the country reeling from uncertainty. Neither party won a majority in Parliament and Prime Minister Theresa May failed to accomplish her goal of a stronger majority desired to assure her party’s platform for Brexit negotiations. In a surprise effort of calling an early election, her hope was to curb the political divisions that she views as harmful to the process of moving Brexit forward. What has happened in the resulting election process has provided an opposite effect.
Prime Minister May’s main issue for the election was the future negotiations of Brexit and in a speech earlier this month she said, “And as we come together behind this great national mission – to make a success of Brexit and of the opportunities it brings – we will build a more united country as our shared values, interests and aspirations bring us together.”
What’s next for Prime Minister May’s Conservative Party? That appears to be anyone’s best guess and predictions at this junction are purely speculative in my opinion. Britain is one of the world’s top 10 economies and its impact on worldwide sentiment is keen so all eyes are on this one!
Regardless of how things transpire over the coming weeks and months, change is on the horizon as economic uncertainty, terrorist incidents, Brexit fears and similar concerns continue to have Britain and the rest of the world lying in wait to find out what’s next.
Because markets do not like uncertainty, and uncertainty is rampant, the main thing to remember is the importance of portfolio diversification as a true hedge to helping your portfolio withstand the impact of events such as the British elections, Brexit and other cyclical events that are certain to take place in the future. Amidst the soul-searching, it is important to remember that investors should not react irrationally before the answers are evident.
Famed British investor Sir John Templeton was famously quoted as saying, “The four most dangerous words in investing are: ‘this time it’s different.'” Black swan events, while unexpected by definition, continue to occur time and time again. In fact, a recent article by Caiman Valores in Seeking Alpha reported that “there are sizable risks globally that could easily spark the next major economic crisis and the twin threats of a European banking crisis and the E.U. imploding are very real.”
In today’s uncertain times, it is more important than ever for investors to seek out smart managers who thrive on market movement and who understand how to make money both during bull and bear markets. These managers understand what to do and how to make money when there is massive turmoil, no yield in the market, and rampant pessimism. What does it mean to have a true strategy that is unbiased to market direction?
Mediatrix Capital’s account strategy, for example, is absolutely unbiased to market direction. Global investors benefit from a proprietary algorithmic approach that incorporates market correlation overlays and absolute return strategies with distinctive methodologies that integrate actual and implied volatility, quantitative model building, and order-flow analysis.
What does all that mean? It means when the algorithmic probabilities of market direction are correct, participants are making money. It also means that in the event a market direction develops contrary to the probabilities, automated hedging strategies work well. When counter trends develop against the highest probabilities, zone recovery methods help to create profit as well, further proving the success of a strategy truly unbiased to market direction.
In times like this, Next Generation algorithmic trading is a great way to augment performance and safely navigate market volatility. Indeed, high yielding niches in the gold and currency spot markets are now more popular than ever with sophisticated and qualified investors seeking strong returns to make up for broad based losses all too common in the market today. Are you involved in a $5 Trillion a day market? The spot market in the Forex provides interesting portfolio diversification opportunities.
By Michael S. Young, Mediatrix Capital, Inc.
For further information, visit www.mediatrixcapital.com or call 1-800-905-1006.
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