The Lemon Fool

For those holding some cash at the moment, what are your views on the effect that the signing of Article 50 will have on share prices. Are we going to see another steep but temporary drop? Are we best holding fire for a couple of weeks until TM signs on the dotted line? OK, it's all speculation but then it seems a reasonable HYP related question - who does not want to buy shares a little bit cheaper than they could have bought them a few weeks earlier?

The general rule seems to be that if GBP drops FTSE shares go up because of their international weight.

I suspect it is all priced in anyway, but once the deed is done I'd say that the balance of probability is that shares will go up in price not down.

But then I went all in at the beginning of the month so I might be biased.

My opinion is that triggering Article 50 is unlikely to have any further effect. As the terms for Brexit become more concrete, bearing in mind that they will be what the 27 will let us have, and not what we want, then there may be some effect

TJH

monabri wrote:For those holding some cash at the moment, what are your views on the effect that the signing of Article 50 will have on share prices. Are we going to see another steep but temporary drop? Are we best holding fire for a couple of weeks until TM signs on the dotted line? OK, it's all speculation but then it seems a reasonable HYP related question - who does not want to buy shares a little bit cheaper than they could have bought them a few weeks earlier?

I'm continuing as normal, and playing the strategic ignorance card. I have no idea as to what is going to happen so am not wasting my time worrying about it.

Ian.

idpickering wrote:
I'm continuing as normal, and playing the strategic ignorance card. I have no idea as to what is going to happen so am not wasting my time worrying about it.

Ian.

Here here!

OLTB.

OLTB wrote:

idpickering wrote:
I'm continuing as normal, and playing the strategic ignorance card. I have no idea as to what is going to happen so am not wasting my time worrying about it.

Ian.

Here here!

OLTB.

Thank you OLTB.

Ian.

I'm not saying to worry about it but if 9/10 HYPers were of the opinion that it might be best to hold off buying then it might be an influence. Of course, no one can tell what will happen. I tabled the question merely for discussion (ok, mild speculation).

In my case it's not just strategic ignorance, it's the full Monty. I have no idea how the market will react to the inevitable signing of article 50.

Mind you there can be no-one left that hasn't acknowledged/resigned themselves to its being signed so my best guess would be for no appreciable change.

The changes (one way or the other) are likely to occur I think as the details of our future relationship with the EU leak out.

Regards,
Chris

monabri wrote:
For those holding some cash at the moment, what are your views on the effect that the signing of Article 50 will have on share prices. Are we going to see another steep but temporary drop? Are we best holding fire for a couple of weeks until TM signs on the dotted line? OK, it's all speculation but then it seems a reasonable HYP related question - who does not want to buy shares a little bit cheaper than they could have bought them a few weeks earlier?

I've put in bold the key comment here, I think.

I'm not sure a couple of weeks is going to make much difference one way or another, so if that's really the sort of time-scale you're worried about then I don't think it's going to make much difference either way.

If you're worried about longer-term consequences, then why not move away from investing 100% of what you might have invested going forward, and hold even some of it back until either you're less worried, or your worries come to fruition and you're able to invest at lower prices?

You might lose a small amount of income, but you might feel better in yourself for holding on to some capital during a period where you're not comfortable with a 100%-invested position.

It always interests me when, during these sorts of discussions, people say "We don't know which way the market is going to go". If that's the case, then why invest 100% on it going in one direction? Seems to be a hedge in words only, with the actions not hedging anything at all....

I'm actually drip-feeding funds into the market currently, but that's only after a period where I've allowed incoming dividends and new capital to build up to a relatively substantial amount. I've not been a seller at all, and I find that I can emotionally handle tricky market periods by just collating dividends and new capital during periods where I'm not comfortable with my normal steady-investment approach. I'll keep hold of the accumulated capital, and am now investing any additional income (dividends and new capital) over and above that initial cash element still being held.

This approach is a real help to me in terms of having no trouble at all keeping invested with my current HYP portfolio, and I've never felt any pressure to actually sell any current holdings due to being able to play tunes with the cash element of it, so this might be something worth thinking about if you're worried about anything further out than the two-week period you mention above.

We've all got to sleep at night, let's not forget....

Cheers,

Itsallaguess

monabri wrote:For those holding some cash at the moment, what are your views on the effect that the signing of Article 50 will have on share prices. Are we going to see another steep but temporary drop? Are we best holding fire for a couple of weeks until TM signs on the dotted line? OK, it's all speculation but then it seems a reasonable HYP related question - who does not want to buy shares a little bit cheaper than they could have bought them a few weeks earlier?

This is surely a case where strategic ignorance is your friend. Stop worrying and just drip feed into the market - any benefits/disbenefits from holding off for a couple of weeks will seem pretty minor in the rear view mirror 20 years later.

There is quite enough to think about with events that have actually happened without worrying about short term imponderables - which are just a distraction. My brain is fully engaged just thinking about Unilever right now. A buy/sell decision on ULVR is likely to have much more significance for my personal HYP than any short term attempt to time the market.

Does anyone think that article 50 is not priced in? I'd agree there is room for a bit of uncertainty, mainly over timing - it's just possible, if unlikely, that the HoL could slow things down a bit by amending the bill. There may be further small drop in the £, which is likely to have a short term +ve effect on the markets, but unless there are a lot of institutional investors asleep at the wheel out there I can't see it being large.

It all depends on your time scale.

If you are investing for decades it is unlikely that one event will have much significance.

However, if your trading to make money in the short term different approaches are needed.

The best tactics for recent shocks to the system such as Brexit & Trump election has been to be in cash before the event. For Brexit anyone buying once the initial selling had occurred, day 1 & day 2 post event did extremely well.

For Trump the tactics were similar, except one had to be in cash several days before the election as the markets sold off and then began to recover before Trump won. Anyone who bought as the markets started to move off the lows did very well.

The difference now is that the signing of article 50 divorce is expected & less likely to produce volatility. However, should something emerge that points to an unexpected development that upsets the complacent attitude one can expect volatility, especially as markets have moved a long way up since Brexit.

Regards,

I think, I thought all along, that being in or out of the EU/single market/customs union, makes a lot less difference to business than they would all like you to think.

Sure, they have to fill in a form, queue up for customs, pay a few percent tariff. Yes, it's a bit extra hassle. But any business that is shipping goods hundreds of miles across Europe for a couple of percent margin was doomed to failure either way.

I still think the biggest threat to the uk economy is eurozone banks, rather than Brexit.

Gryff

Article 50 has got to be priced in and should be ignored.

Nobody can tell what will really happen over the next few years. However, investors would be advised, in my opinion, to keep a little cash ready to take advantage of any opportunities that might arise.

As investors we must keep a free mind and ignore personal political preferences and wishful thinking.

Given all the articles about how complex the exit, transition and final trade deals are likely to be, the timing dangers and the likelihood of seemingly irrational political posturing, it would be truly amazing if progress was smooth. FTSE downside seems more likely than up. We should be ready with a defined target.

My target to buy UK shares is based on $US 1.0 = £1.05. That seems optimistic at the moment, though UBS are predicting this figure. It may never happen. If it doesn't, no hard feelings.