This week's update comes from our Advisory team based in Guernsey.

Let’s face it, the UK is a particularly miserable place at the moment. The Conservatives are alienating as many people as possible whilst their leader bounces from one shamble bubble to the next. The population is divided over Covid and the economy is in a mess. Waiting to put the boot in is Brexit and unemployment is predicted to rise to 7.5% by year end. Communication is befuddled and bewildering and even Christmas is under threat. This is a big black dog.

But we’re better than this. “Catastrophising” is our speciality but resilience is in our soul. It seemed to me that as Covid weakened we stampeded back to the shops, factory activity grew and unemployment stabilised. In essence we got on with it. Yes, it’s reappeared but the window in between was a view full of clues. Furthermore, Brexit is no more than a playing field for political posturing and in reality it will turn out to be much less of a big deal than it seems now.

When I analysed the statements from listed companies across the London Stock Exchange and the AIM market last week, I was surprised to note that about 85% were either in line or had beaten expectations. That is a pretty good result and shows improvement over summer.

Admittedly expectations have been dramatically lowered this year, but businesses are learning to cope with the conditions. So if underlying corporate profitability is starting to recover, what about the dividends they pay? Research undertaken by Link Group, an investor services business shows that in the third quarter of this year, UK companies looking to preserve cash roughly halved the amount they paid in dividends compared with last year. Whilst this is a bleak statistic it is also interesting to note that total dividends paid were up by nearly 12% over those paid in the second quarter.

Undeniably, I think we all feel the additional pressure from tighter restrictions but the data also showed resilience in the UK compared to the Eurozone where the picture is slightly worse and more post Brexit trade deals like the one signed this week with Japan, may well change investor confidence in the UK stock market.

Furthermore, all this negativity has created an interesting situation. The UK stock market is at a significant discount to global markets whilst value stocks are at their biggest discount ever. Difficult though it may seem, the UK will bounce back - it is not a lost cause.

Those companies we considered bulletproof have been ravaged by a general insistence that the world is coming to an end, or at the very least, the UK will cease to have any influence whatsoever. But those companies are not suddenly bad companies. They’re still run by highly competent, invested executives, conscious above everything that they’re representative of their stakeholders. These executives are tinkering and strategising, looking over their shoulders but more likely looking to the future. Some will get burned, some already have but most are battling this barrage in the full knowledge that their corporation has the wherewithal to both survive and go again.

So if you can free your mind (and avoid the BBC), imagine the situation post misery. Those huge discounts will evaporate in a heartbeat and whilst you’re never going to time things perfectly, it would be better to be positioned now rather than to wait for a sign from someone like me.