As Britain prepares for its exit from the European Union, and Scotland petitions for a second referendum, the economy is facing an ambiguous future.

Mike McAnulty, director at Central Investment, one of Scotland’s leading firms of Independent Financial Advisers, discusses the importance of keeping your portfolio adequately diversified during times of volatility.

Political tides are turning, new economic relationships are failing and forming, and new countries are emerging as the global powerhouses of the future.

While Brexit is the immediate concern facing many investors today, the world’s problems spread far wider, any one of which could derail a portfolio that is not sufficiently balanced and diversified.

With over 40 years’ financial experience, the Central Investment team has witnessed booms, recessions, depressions and record-breaking bull markets.

We frequently remind our clients that it is seldom wise to react to short-term fluctuations and that it is almost always sensible to take a long-term view with your investments. Investors can become nervous when we experience periods of heightened volatility, however markets tend to resume an upwards trend over time.

Of course, such volatility can be stressful. Anybody who saw their investments tumble in value in the wake of the financial crisis in 2008/2009 could hardly have thought that the following decade would see such spectacular growth, with markets around the world reaching all-time highs.

We find ourselves in a similar position with Brexit, as well as the potential now for another Scottish referendum. Whilst the outcome is uncertain, businesses and trade require innovators to keep advancing and this is something we expect to witness in the coming years. Businesses will evolve to whatever circumstances they find themselves in.

Therefore, it is important to ensure there is a clear focus on keeping your portfolio adequately diversified, and that you remain alert to the possibility of any opportunities that such seismic changes throw up.

If you are unsure as to whether your investments are positioned correctly, then there could not be a better time to see your financial adviser for a review of your holdings and your asset allocation.

Spreading your money across geographical regions and sectors will not guarantee that your investments avoid any potential turbulence, but it should minimise the impact.

It inevitably happens - markets turn upwards again, and holding firm will mean there is less chance that you will miss out on key rallies. After all, history shows that missing just a few days in the early days of a bull market can have a disproportionate effect on your total returns. Hence the saying, “it is time in the market - not timing the market - that you need to worry about.”

It is imperative that you are comfortable with your investment goals and your tolerance of risk, therefore, you should seek a regular review with your adviser to stay on top of this. At times like this it makes sense to keep your money where it can work hardest, without undue risk.