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Investing in Elections
The countdown is on to the December 12th General Election and electioneering is in full swing. As leaflets drop through letterboxes and candidates knock on doors, the shape of the election manifestoes are starting to become clear. But what effect do election statements have on investment markets and should we take notice of headlines when making investment decisions?
Whilst it is true that some of the announcements so far have resulted in share price movements, it has to be remembered that best investment advice looks to long term outcomes based on an individual’s own circumstances rather than short term events, particularly at election time. For example, in the 2017 election a Brewin Dolphin article commented that “making investment decisions based on expected election outcomes is dangerous.” Whilst this time around Fidelity hasn’t gone as far as that, one of its recent articles commented that “In this environment, it’s probably inadvisable for UK investors to bet on one outcome or another by focusing on one particular area of the stock market.”
So whilst the investment markets as a whole are anticipating the potential for some movement in the stock exchange and in sterling once the election results have been announced, in the meantime the standard advice is not to react to individual announcements. We continue to work with our clients to advise on the most appropriate investment mix based on their own long-term goals.
If you are looking for advice on investments, or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.