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Investors sitting on significant profits post-Trump and Brexit should be wary of taking these gains for granted , writes Daniel Lanyon

CONSENSUS IS WRONG , you definitely know about it – just look at 2016 . At the start of last year , investors expected several rate rises from the Federal Reserve , a vote for the UK to remain in the European Union and a comfortable victory for Hillary Clinton over the seemingly unelectable loudmouth Donald Trump . Oh , how wrong the market can be .

Brexit and Trump were the two biggest shocks of 2016 of course , but just as surprising was how both results precipitated strong rallies in the UK and US stock markets , respectively .

These shock bull runs , while prompting massive bouts of uncertainty , meant 2017 ushered in new stock market highs on both sides of the Atlantic . But what if these new consensus trades go wrong ? Should investors lock in their profits now ?

A STERLING EFFORT Brexit prompted a crash in the value of the pound which , while bad for holiday-makers , was great for the FTSE 100 . It made UK exports more competitive and boosted the multi-nationals which derive the majority of earnings from overseas .

Adrian Lowcock , investment director at Architas , notes the rally was initially led by defensive companies such as tobacco , pharmaceuticals and consumer staples . However , this trend has unwound in recent months as investors switched from these so-called bond proxies into cyclical stocks such as financials and miners .

Gavin Haynes , managing director of Whitechurch Securities , notes there has also been a relief rally in more domestic areas of the UK after economic data proved to be more robust than expected .

“ Banks in particular have rallied strongly and a reversal in sentiment over the strength of the UK economy would hit the sector hard ,” he said .

Rob Morgan , pensions and investment analyst at Charles Stanley Direct , says better growth prospects from the Trump-led

12 trustnetdirect . com