Market Turbulence: How Do Portfolios Stay Balanced?

As the UK braces for the Autumn Budget on the 26th of November, investors are watching closely. Fiscal events like this often ripple through markets, influencing everything from gilt yields to equity valuations. With speculation mounting about tax rises, spending cuts, and reforms to ISAs and property taxation, the question for many is: how do you keep your portfolio balanced during periods of market turbulence?

With the upcoming autumn budget, Chancellor Rachel Reeves faces a fiscal shortfall estimated at £30–40 billion, driven by downgraded productivity forecasts and higher borrowing costs. To plug the gap, the Budget is expected to lean heavily on tax increases. Markets have already priced in some uncertainty. The FTSE 100, which hit record highs this year, could see volatility if fiscal tightening dampens growth expectations. Meanwhile, gilt yields have fallen recently on hopes of a responsible Budget.

In times of policy-driven volatility, resilience comes from structure, not speculation. The structure of a good portfolio can be broadly categorised into:

1. Diversification Across Asset Classes
   Spreading investments across equities, bonds, and alternatives reduces reliance on any single market outcome. Bonds often act as a stabiliser when equities wobble, while real assets like property or commodities can hedge against inflation.

2. Dynamic Asset Allocation
   Adjusting exposure based on macro signals, such as shifting towards defensive sectors or increasing fixed-income holdings during fiscal tightening, helps to manage risk without abandoning long-term goals.

3. Liquidity and Risk Management
   Maintaining cash reserves and using hedging tools like protective options can cushion short-term shocks. For long-term investors, strategies like drip feeding into funds ensure you stay invested without trying to time the market.

Budgets come and go, but disciplined investing endures. Our approach focuses on robust portfolio construction, tailored to help you weather scenarios like fiscal tightening and interest rate shifts. By blending global diversification with UK-specific opportunities, we aim to keep your wealth strategy aligned with your goals. When markets react to events like the Autumn Budget, the portfolios that stay steady are those built on principles, not predictions. If you’d like to review your investment strategy ahead of the Budget, speak to your GDA adviser today.

This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.

Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. The value of investments, and the income or capital entitlement which may derive from them, if any, may go down as well as up and is not guaranteed; therefore investors may not get back the amount originally invested.