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Brexit SIPP Investment strategies

Including Financial Independence and Retiring Early (FIRE)
BennGunn
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Brexit SIPP Investment strategies

#166917

Postby BennGunn » September 17th, 2018, 1:01 pm

I'm interested in any advice/thoughts the learned folks on here have relating to the impact of Brexit on their investment strategies for their SIPP.

My own, simplistic approach, is to hold a portfolio invested across a range of investment types (Equites/Bonds), Geographies and Sectors with a goal of avoiding too much reliance on UK equities

tjh290633
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Re: Brexit SIPP Investment strategies

#166921

Postby tjh290633 » September 17th, 2018, 1:09 pm

My attitude is to stay fully invested. A good number of the shares which I hold have international interests,. And I see no point in switching to counter something which may or may not have an effect.

TJH

Failedtheturingtest
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Re: Brexit SIPP Investment strategies

#197158

Postby Failedtheturingtest » January 28th, 2019, 8:10 pm

I took the position a long time ago that the UK is a small island in the global scheme of things, so my investments are 80% in global funds and only 20% in UK assets. Even that is over-weighted towards the UK in market cap terms. But I think staying mostly global is a good move in any case, and good Brexit insurance in particular.

I also, about a year ago, bought 5% of my portfolio in a gold ETF (SGLP) as additional insurance. If the value of the pound sinks, overseas stocks and gold should rise.

I was wondering, for a while, if I should do anything to 'protect' myself against a 'good Brexit': the scenario where a solution is found to all of the problems and the value of the pound shoots up. I can only think of holding extra cash.

Abadi
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Re: Brexit SIPP Investment strategies

#198824

Postby Abadi » February 4th, 2019, 1:35 pm

My protection against a good Brexit is to buy 'Short USD Long GBP', when I buy a global stock.

Hariseldon58
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Re: Brexit SIPP Investment strategies

#198932

Postby Hariseldon58 » February 4th, 2019, 8:48 pm

@BennGunn

I’d agree with TJH to remain fully invested.

No one, absolutely no one knows what will happen.

I made a move to increase US assets and go underweight UK, in early 2016, that worked out well.

The UK economy has done ok since Brexit, market has done nothing positive, UK market is pretty cheap and deeply unloved. The currency is pretty weak.

I rather suspect that after the exit process, however long that takes, that the economy will make progress and given some time the UK market will make progress relative to international markets.

The pound can clearly fall further but every time there is signs of progress in talks the pound strengthens,
the markets tendency will be for the currency to strengthen.

If you have a portfolio with both UK and international assets then you have a natural hedge.

Brexit goes well, UK market rises, pound strengthens
, value of international holdings goes down in sterling terms.

Brexit goes badly, UK stocks fall, pound weakens and international stocks rise in sterling terms.

My instinct has led me to reduce international holdings and top up on UK Investment trusts at a discount.

But no one knows including me ! I’d suggest a diversified portfolio but at the very least I would not underweight UK assets.

Charlottesquare
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Re: Brexit SIPP Investment strategies

#199275

Postby Charlottesquare » February 6th, 2019, 12:02 pm

Hariseldon58 wrote:@BennGunn

I’d agree with TJH to remain fully invested.

No one, absolutely no one knows what will happen.

I made a move to increase US assets and go underweight UK, in early 2016, that worked out well.

The UK economy has done ok since Brexit, market has done nothing positive, UK market is pretty cheap and deeply unloved. The currency is pretty weak.

I rather suspect that after the exit process, however long that takes, that the economy will make progress and given some time the UK market will make progress relative to international markets.

The pound can clearly fall further but every time there is signs of progress in talks the pound strengthens,
the markets tendency will be for the currency to strengthen.

If you have a portfolio with both UK and international assets then you have a natural hedge.

Brexit goes well, UK market rises, pound strengthens
, value of international holdings goes down in sterling terms.

Brexit goes badly, UK stocks fall, pound weakens and international stocks rise in sterling terms.

My instinct has led me to reduce international holdings and top up on UK Investment trusts at a discount.

But no one knows including me ! I’d suggest a diversified portfolio but at the very least I would not underweight UK assets.


The catch is , what is a UK stock given, certainly within the FTSE100 ,large numbers earn their profits outwith the UK and not in Sterling. There is a fair bit of digging to do if, like me, you now tend to hold Investment Trusts, to dig down to see what the underlying investments held by say City of London, Merchants and Edinburgh actually are and to judge how the Trust might be impacted.

To take Merchants, as an example, its top holdings are Shell, BP, Glaxo, HSBC, Lloyds- of the five I am pretty sure only LLoyds earns most of its income in the UK market in Sterling, the oil stocks work in dollars and whilst I have never checked Glaxo I strongly suspect that it has a pretty high overseas earnings element.

And there is the catch, Uk Investment trusts often have underlying investments not earning in sterling.

Hariseldon58
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Re: Brexit SIPP Investment strategies

#199438

Postby Hariseldon58 » February 6th, 2019, 10:58 pm

@CharlotteSquare

Clearly some UK sticks are heavily exposed to non sterling income, the smaller stocks are probably more exposed to sterling.

At present UK stocks , regardless of where they earn their income are unloved on the world stage and I believe that offers an opportunity to purchase good companies at valuations below that of other markets.

Time will tell !

Charlottesquare
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Re: Brexit SIPP Investment strategies

#199751

Postby Charlottesquare » February 7th, 2019, 10:48 pm

Hariseldon58 wrote:@CharlotteSquare

Clearly some UK sticks are heavily exposed to non sterling income, the smaller stocks are probably more exposed to sterling.

At present UK stocks , regardless of where they earn their income are unloved on the world stage and I believe that offers an opportunity to purchase good companies at valuations below that of other markets.

Time will tell !


Afraid as I have got older I have got pickier re individual stocks so tend to chase ITs and do not spend that much time with the choosing part these days to see the sorts of underlying shares they own. I tend more to go, I like China or I favour North America at the macro level and then find something out of the population of ITs that fits my requirement in that sector that allows a blended portfolio dividend yield close to 4%. My ITs these days actually yield more than my direct holdings as I decided to buy a good size wodge of Berkshire Hathaway as a surrogate US IT but it sits with my two remaining single shares I still own, Shell and Unilever, when comparing IT yield and direct share yield, possibly actually slightly unfairly to the latter given my motive for buying.

PrefInvestor
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Re: Brexit SIPP Investment strategies

#200075

Postby PrefInvestor » February 9th, 2019, 8:44 am

First post on this site today, so just putting my toe in the water really. Have been using ii for years but quality of posting there has gone down enormously since the introduction of the new boards there. I have been adopting various strategies with my investments since late last year and I made quite significant savings from selling many of my UK equities when they were falling. I have been using the opportunity to restructure my portfolio to use ITs and Dividend ETFs only retaining a small number of single stocks (BP, shell, gsk etc.). I am retired and income focussed and generally only invest in things paying at least a 4.5% dividend. I don’t touch growth stocks or ANY mutual funds at all.

Anyway that’s enough for a first post. Wonder what it will look like !

ATB

Pref

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Re: Brexit SIPP Investment strategies

#200097

Postby BrummieDave » February 9th, 2019, 11:39 am

Hello Pref

Glad you've posted here for the first time.

I'm also a retired income seeker, using ITs to complement a DB pension. Perhaps you'd like to share your portfolio at some stage, it's always interesting to see how someone else is approaching a similar objective to oneself. You'll find mine if you search on my name btw.


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