London explosions

A series of explosions have been reported around London this morning, the first reported at 08:49. At the time of writing it seems increasingly likely that these are a series of bombs which have effectively encircled the financial services district of central London.

The picture is still confused, as details of the blasts continue to emerge.

The UK stock market has fallen between 2.5% and 3% since these events, in common with other European stock markets. While this is a large single movement in the market, it is relatively insignificant in the context of the recovery of the UK stock market in the last few months, provided the market does not continue to fall at such a rapid pace. This will depend on the details and extent of these events as they emerge, but one has to recognise the degree to which global stock markets have already moved to 'price-in' the possibility of terrorist events since 11 September 2001.

History has shown that it can be very unwise for the private investor to try to time such movements in stock markets, to protect the value of their investments. For more information, please refer to the study provided by Fidelity Investments .

There has been increased activity by investors this morning. While you have the option to move your investments into safer havens (notably cash and some bonds) you must remember that you are unlikely, except by chance, to time your exit and, more importantly, your re-entry into the stock market effectively – even professional investors struggle to do so reliably.

Nonetheless, should you wish for advice about moving your investments into cash or other lower risk assets in reaction to these events, please do not hesitate to contact us and we will be pleased to discuss the matter in more detail.