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Election impact on investment strategy

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
richfool
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Re: Election impact on investment strategy

#263188

Postby richfool » November 9th, 2019, 11:36 am

jonesa1 wrote:
TheMotorcycleBoy wrote:Unless of course Jeeza has banned elections and replaced Parliament with the Politburo.

Matt


There's no need to ban elections, just make sure you always win them - e.g. extend the franchise to 16 year olds (you'd be amazed how much of the party propaganda my nieces, in their 20s, have swallowed), post-election transform to born-again remainers, retain free movement and allow EU nationals to vote. Marxists (and other extremists) usually try to game the electoral system once they are elected, I wouldn't expect this lot to be any different.

Regarding the prospect of extending the voting age down below 18, I have to say I recollect having little or no interest in, or knowledge of politics or the economic health of the country, when I was 16, 17, 18, 19, or 20. Agreed that's not to say that everyone of that age is the same, but I can't help thinking that youngsters in the age range up to 21 even, don't really have any experience or background knowledge of relevant facts, unless perhaps for example, they have studied politics. They have yet to see the bigger picture over many years and of many different political parties/governments.

On thursday or friday I watched a TV interviewer interviewing 3 students in the run up to the general election. The first one spoke of how she didn't like Corbin or what he stood for and didn't want him to be PM. Yet when she was asked who she would vote for, she said she would vote Labour, (because she liked her local MP, who said and did the right things). The second student, said she would vote Lib/Dems, as she saw them as a sensible middle ground, not as left wing as Labour, or as right wing as the Conservatives. The third student favoured Brexit and would vote Conservative.

I do think that lowering the voting age any lower would draw in youngsters would not really understand the issues, or would only have a very short-sighted view of issues close to themselves and who would be easily mislead by politicians. Look at Corbin's inducements about dispensing with student university fees at the last general election, a policy that he later conceded he couldn't have afforded to implement, but which certainly gained him votes. I think a voting age of 20/21 would have been more appropriate.

Moving back closer to the topic, the way the polls are showing, it doesn't look like Labour will get in, though I appreciate there could be danger from alliances and coalitions. So I am hopeful that none of McDonnell's extreme policies will be implemented.

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Re: Election impact on investment strategy

#263203

Postby scrumpyjack » November 9th, 2019, 12:19 pm

The interviewer obviously carefully selected the students so they had one from each of the three main parties.

As for lowering the voting age, studies have shown that the rational part of the brain is not fully developed until age 25
https://www.urmc.rochester.edu/encyclop ... entID=3051

Still politicians will decide that issue purely on party political interest.

As for investment strategy now, I think inaction is the best course. It will be Murphys law that if I do try to plan for it, whatever I do will turn out to have been the worst thing to do!

ayshfm1
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Re: Election impact on investment strategy

#263247

Postby ayshfm1 » November 9th, 2019, 4:20 pm

TheMotorcycleBoy wrote:
TUK020 wrote:
richfool wrote:Yes, but which Government's (country's) bonds?


Counter-intuitively, when you get a transition from low inflation to high inflation, cash is a good place to be.
You want to sit out the 're-pricing' of bonds until they have re-established a yield commensurate with the new inflation expectations, and only then buy in to bonds.

At last! Someone finally gets my point, thanks TUK.


Matt


Gold would be better than cash? After all JC could and has no issues with just running the printing presses.

I'm pretty sure JC is not the ban election type. Unforunately I'm equally sure there are plenty pulling his strings that are. I've had some dealing with the hard left and they are sure I'm wrong and would like to cut to the chase and stop pandering to this democracy nonsense.

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Re: Election impact on investment strategy

#263261

Postby TheMotorcycleBoy » November 9th, 2019, 5:11 pm

ayshfm1 wrote:
TheMotorcycleBoy wrote:
TUK020 wrote:
Counter-intuitively, when you get a transition from low inflation to high inflation, cash is a good place to be.
You want to sit out the 're-pricing' of bonds until they have re-established a yield commensurate with the new inflation expectations, and only then buy in to bonds.

At last! Someone finally gets my point, thanks TUK.


Matt


Gold would be better than cash? After all JC could and has no issues with just running the printing presses.

I'm pretty sure JC is not the ban election type. Unforunately I'm equally sure there are plenty pulling his strings that are. I've had some dealing with the hard left and they are sure I'm wrong and would like to cut to the chase and stop pandering to this democracy nonsense.

Don't worry I was being somewhat flippant in my reference to banning elections :lol:

It just seemed to that the convo was starting to turn a tad surreal what with all the chat about millennials and folk who've never claimed MIRAS or how we are headed for Venezuela 2.0.

However back to the topic, yes I've heard talk of people putting their money "in gold". Hmm I'm not sure it's for me though, I'm just sticking to my guns, it's not like I'm mega-rich anyway.

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Re: Election impact on investment strategy

#263269

Postby Lootman » November 9th, 2019, 5:32 pm

TheMotorcycleBoy wrote:I've heard talk of people putting their money "in gold". Hmm I'm not sure it's for me though, I'm just sticking to my guns, it's not like I'm mega-rich anyway.

If the desire is to turn your net worth into something real and portable because of fears for the nation, then I'd choose diamonds over gold. Going through an airport with a couple of bars of gold would attract scrutiny. But a small bag of high quality diamonds would be easier to conceal and carry.

Both also have the advantage of being anonymous so, if a malignant government was seeking to track and confiscate your wealth, it would be a lot harder for them.

Otherwise cash and hawala might be the way . .

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Re: Election impact on investment strategy

#263299

Postby Spet0789 » November 9th, 2019, 8:56 pm

Lootman wrote:
TheMotorcycleBoy wrote:I've heard talk of people putting their money "in gold". Hmm I'm not sure it's for me though, I'm just sticking to my guns, it's not like I'm mega-rich anyway.

If the desire is to turn your net worth into something real and portable because of fears for the nation, then I'd choose diamonds over gold. Going through an airport with a couple of bars of gold would attract scrutiny. But a small bag of high quality diamonds would be easier to conceal and carry.

Both also have the advantage of being anonymous so, if a malignant government was seeking to track and confiscate your wealth, it would be a lot harder for them.

Otherwise cash and hawala might be the way . .


Problem is that buying diamonds incurs VAT. Better just to have some USD in an offshore account.

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Re: Election impact on investment strategy

#263508

Postby ayshfm1 » November 11th, 2019, 2:36 pm

TheMotorcycleBoy wrote:Don't worry I was being somewhat flippant in my reference to banning elections :lol:


And here in is the problem. I know some of these people (not the high ranking ones it's true) from childhood and they absolutely despise democracy. The collective "we" keep failing to understand what is good for us it would so much better if the one true way was not optional.

They do not want another Government coming in and undoing all their "good" work as has happened in the past.

Hence I'm not being flippant, elect Corbyn and there is a real risk you'll never get his replacement out.

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Re: Election impact on investment strategy

#263613

Postby TheMotorcycleBoy » November 12th, 2019, 5:49 am

ayshfm1 wrote:
TheMotorcycleBoy wrote:Don't worry I was being somewhat flippant in my reference to banning elections :lol:


And here in is the problem. I know some of these people (not the high ranking ones it's true) from childhood and they absolutely despise democracy. The collective "we" keep failing to understand what is good for us it would so much better if the one true way was not optional.

They do not want another Government coming in and undoing all their "good" work as has happened in the past.

Hence I'm not being flippant, elect Corbyn and there is a real risk you'll never get his replacement out.

Maybe, but you really need to create a new thread to do this one to death, my friend. It's not investment strategy.

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Re: Election impact on investment strategy

#264442

Postby torata » November 15th, 2019, 9:01 am

richfool wrote:.

Regarding the prospect of extending the voting age down below 18, I have to say I recollect having little or no interest in, or knowledge of politics or the economic health of the country, when I was 16, 17, 18, 19, or 20. Agreed that's not to say that everyone of that age is the same, but I can't help thinking that youngsters in the age range up to 21 even, don't really have any experience or background knowledge of relevant facts, unless perhaps for example, they have studied politics. They have yet to see the bigger picture over many years and of many different political parties/governments.

<Snip>

I do think that lowering the voting age any lower would draw in youngsters would not really understand the issues, or would only have a very short-sighted view of issues close to themselves and who would be easily mislead by politicians.


Hmmm...
I offer this example.
My mother, currently 77, voted for Brexit because a) she "hates Neil Kinnock and wanted to punish him for being a European Commissioner on a huge salary that she is paying for", and b) "there are too many refugees from places like Syria who don't speak English who are overrunning the NHS".
Perhaps she doesn't qualify to vote either?

Investment strategy?
I have no idea how any of this is going to pan out. So, keep on doing what I've been doing - basically reinvest the dividends to re-balance back to my globally diversified allocation percentages while keeping costs as low as possible.

torata

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Re: Election impact on investment strategy

#264465

Postby richfool » November 15th, 2019, 9:58 am

torata wrote:
richfool wrote:.

Regarding the prospect of extending the voting age down below 18, I have to say I recollect having little or no interest in, or knowledge of politics or the economic health of the country, when I was 16, 17, 18, 19, or 20. Agreed that's not to say that everyone of that age is the same, but I can't help thinking that youngsters in the age range up to 21 even, don't really have any experience or background knowledge of relevant facts, unless perhaps for example, they have studied politics. They have yet to see the bigger picture over many years and of many different political parties/governments.

<Snip>

I do think that lowering the voting age any lower would draw in youngsters would not really understand the issues, or would only have a very short-sighted view of issues close to themselves and who would be easily mislead by politicians.


Hmmm...
I offer this example.
My mother, currently 77, voted for Brexit because a) she "hates Neil Kinnock and wanted to punish him for being a European Commissioner on a huge salary that she is paying for", and b) "there are too many refugees from places like Syria who don't speak English who are overrunning the NHS".
Perhaps she doesn't qualify to vote either?

Investment strategy?
I have no idea how any of this is going to pan out. So, keep on doing what I've been doing - basically reinvest the dividends to re-balance back to my globally diversified allocation percentages while keeping costs as low as possible.

torata

So at least she's been around long enough to know who Neil Kinnock is. ;)

I've eased up my UK exposure ready to capitalise on any post election boost. (And am pleased to say I don't hold BT).

I've also got some gold just in case.

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Re: Election impact on investment strategy

#267009

Postby richfool » November 25th, 2019, 1:21 pm

Based on the recent release of their election manifestos, I've been pondering what action to take if either Labour or the Conservatives gain a majority in the GE.

If Corbin became PM, I think I would significantly reduce my UK IT's and further increase my holdings of overseas focused IT's. I would sell any direct holdings I have of UK companies with more than 250 staff and sell any utilities. I would also ensure that all my holdings were protected i.e. within my ISA. Additionally, I would liquidate some cash in case more drastic action or relocation became necessary.

If the Tories gained an overall majority, I would anticipate my UK IT and direct holdings would increase in value, particularly if he finally gets "Brexit done", so I would sit tight on those holdings and my infrastructure focused holdings.

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Re: Election impact on investment strategy

#267087

Postby Hariseldon58 » November 25th, 2019, 5:52 pm

@richfool

I understand the temptation to do something.

I struggle to see why one should overweight the UK significantly now, December 12th removes one uncertainty, but plenty more will remain for quite a while... Corbyn is unlikely to win an outright majority according to the bookies, I suspect the markets have mostly priced in the predicted election results

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Re: Election impact on investment strategy

#267089

Postby TheMotorcycleBoy » November 25th, 2019, 6:17 pm

Well, I don't know about the rest of you here, but since I'm building me portfolio I try to buy between 1-4 times each month.

I'm mostly running a LTBH strategy, trying to focus on Growth with Income, mostly standalone shares from FTSE350. Also have a few AIMs and a few US shares and one German (Adidas) share.

Right now I am finding it quite difficult figuring out what shares to invest my bonus in. Lots of my fave UK shares like Marshalls, Games Workshop, Next, Spirax-Sarco, Softcat etc. are really motoring especially in the last fortnight, and well out of my buy price range.

I'm definitely feeling very mindful of Warren Buffet's advice "be fearful when others are being greedy", and finding it v. hard to know what to buy next. I think the market has definitely priced in a Tory win, and it feels (from the market's perspective) to be that the market expects that whatever happens re. Brexit will be good for our economy. That's the feeling I'm getting. But perhaps it's a blip and maybe closer to the election run up markets will be more volatile?

Currently I'm thinking the best UK buys are Diageo (DGE) and Unilever (ULVR). Am guessing high sterling is making them priced cheaper. Tempted to buy more of either, but also thinking that maybe we'll see a pound buying +$1.30 soon and then DGE and ULVR will fall even more.

Matt

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Re: Election impact on investment strategy

#267115

Postby Alaric » November 25th, 2019, 7:50 pm

TheMotorcycleBoy wrote:Currently I'm thinking the best UK buys are Diageo (DGE) and Unilever (ULVR).


Both Companies are, or were, very good for increases in dividends. The share price kept pace and sometimes grew even faster, which has left both shares with dividend yields below the FTSE 100 average. The share prices of both of them have dropped over the last three months. Perhaps that's a buying opportunity or a warning of problems ahead.

http://tools.morningstar.co.uk/uk/stock ... E%24%24ALL
http://tools.morningstar.co.uk/uk/stock ... 0P00007O7R]3]0]E0WWE$$ALL

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Re: Election impact on investment strategy

#267199

Postby thebarns » November 26th, 2019, 1:13 am

For those considering active investment strategies hoping to react to the election result whether that be buying or selling uk shares with mostly uk or overseas earnings, or overseas ITs/OEICS/shares, or whatever....

The reaction of the market will be instantaneous at 8am Friday 13th.

Within seconds or minutes, the obvious plays that everyone would do re reacting to a Conservative majority or a Labour majority will already be behind the curve, their obvious plays completely repriced from the day before.

It may be a bit more nuanced and less obvious should the numbers throw up the possibility of a very small Labour supported by others or Conservative minority governments.

Should it become clear overnight that there is a very obvious minority arrangement, the markets will also react within seconds or minutes of the opening.

My tuppence is that the UK market is currently priced in for a likely Conservative majority and will move up some more should that be the final result.

However it only takes Labour to move another 4-6% in the polls for a supported Labour minority government to come into play, which I suspect is still a reasonable possibility.

Depending on the size of that possible minority government, the markets will react accordingly and instantly at 8am Friday 13.

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Re: Election impact on investment strategy

#267208

Postby TheMotorcycleBoy » November 26th, 2019, 6:28 am

thebarns wrote:For those considering active investment strategies hoping to react to the election result whether that be buying or selling uk shares with mostly uk or overseas earnings, or overseas ITs/OEICS/shares, or whatever....

The reaction of the market will be instantaneous at 8am Friday 13th.

Within seconds or minutes, the obvious plays that everyone would do re reacting to a Conservative majority or a Labour majority will already be behind the curve, their obvious plays completely repriced from the day before.

It may be a bit more nuanced and less obvious should the numbers throw up the possibility of a very small Labour supported by others or Conservative minority governments.

Should it become clear overnight that there is a very obvious minority arrangement, the markets will also react within seconds or minutes of the opening.

My tuppence is that the UK market is currently priced in for a likely Conservative majority

That underlines why I'm thinking there's a certain level of greed in the UK markets at this moment in time.

and will move up some more should that be the final result.

Possibly. But don't also markets sometimes fall "when what was already priced" is merely confirmed? I've seen this sometimes when a good firm rallies up to the release of a HY result, and when the result gets released, even if the result was good the SP falls a bit since prior to the release the market had "over reacted" to the possibility of the good results.

As a crystal ball gazer I guess this could well be the case, since we would have this mild short term euphoria, that is, now with folk pricing more lower taxes, lower interest rates, and no Corbyn public/employee ownership threats, only for the bubble to be burst come December 13th, when people realise that, okay the election is done, but now it's back to the reality of solving Brexit.

Matt

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Re: Election impact on investment strategy

#267219

Postby GeoffF100 » November 26th, 2019, 7:57 am

The Lib Dem manifesto says:

"Taxing income from capital more fairly compared to income from work by abolishing the separate Capital Gains Tax-free allowance and instead taxing capital gains and salaries through a single allowance."

That is tougher than the Labour proposal to reduce the allowance to £1,000. The Lib Dems are most unlikely to form a majority government, but this gives an idea of the policies that they would be likely to support if they prop up a Labour or Conservative government.

Another observation is that George Osborne considered capping pension tax relief at the standard rate. I doubt whether Labour or the Lib Dems would refrain from doing that.

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Re: Election impact on investment strategy

#267227

Postby SalvorHardin » November 26th, 2019, 8:43 am

TheMotorcycleBoy wrote:Possibly. But don't also markets sometimes fall "when what was already priced" is merely confirmed? I've seen this sometimes when a good firm rallies up to the release of a HY result, and when the result gets released, even if the result was good the SP falls a bit since prior to the release the market had "over reacted" to the possibility of the good results.

As a crystal ball gazer I guess this could well be the case, since we would have this mild short term euphoria, that is, now with folk pricing more lower taxes, lower interest rates, and no Corbyn public/employee ownership threats, only for the bubble to be burst come December 13th, when people realise that, okay the election is done, but now it's back to the reality of solving Brexit.

Given how hostile Labour's manifesto is towards shareholders, I'd expect markets to rise if there is a Conservative majority and to fall by quite a bit (up to 5%) if there isn't a Conservative majority.

Reaction will be very swift, well before the London Stock Exchange opens on the day after the election. Foreign exchange markets in the Far East will move shortly after the exit poll announcement is made just after 10pm London time. Similarly the FTSE100 futures markets there will also price in this news. By the time London opens the market makers will have already priced in the result before opening quotes are displayed.

IMHO the negatives of Brexit for investors are much less than those of Corbyn. The Economist recently remarked that when their correspondents have talked to senior businessmen who were opposed to Brexit, they considered a Labour government to be far worse than a no-deal Brexit.

YouGov's MRP poll (multilevel regression and post-stratification) is due to be published tomorrow (27th Nov.). This poll should move markets, given that it was by a long way the most accurate poll for the 2017 election.

https://www.newscientist.com/article/21 ... -election/

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Re: Election impact on investment strategy

#267255

Postby UncleEbenezer » November 26th, 2019, 9:55 am

SalvorHardin wrote:Given how hostile Labour's manifesto is towards shareholders, I'd expect markets to rise if there is a Conservative majority and to fall by quite a bit (up to 5%) if there isn't a Conservative majority.

They'd fall if Corbyn were to get a clear majority. But noone expects that. A Corbyn government reliant on the Labour party Establishment (who hate him), let alone one negotiating its way issue-by-issue with other parties, isn't going to get away with the hard-left threats.

As for rising on a Tory majority, I'm not convinced about that - though some of the reaction there will depend on whether they are seen as having squashed the Faragists - which is unlikely. The Tories these days are looking about as ideologically-driven as 1970s Labour, and on issues that would've been associated with the Left back in the days of ruinous socialism. Shareholders may have to get used to the idea that political sentiment has shifted, regardless of who wins on December 12th.

Best outcome is probably a parliament that is again hung (so neither Loon-in-Chief can ruin us), but with a majority who can agree on a way forward for brexit. Probably involving [suppressed lest the thread veer into Polite Discussions].

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Re: Election impact on investment strategy

#267261

Postby scrumpyjack » November 26th, 2019, 10:16 am

Really can’t agree that a hung parliament is a good idea at all. It would merely prolong the uncertainty and divisions in society and in politics. If the consequence was no Brexit that would cause a catastrophic loss of faith in the democratic system (and I voted Remain).

Markets hate uncertainty and would probably fall on this outcome

A huge Conservative majority would be by far the best outcome to finish the Brexit saga quickly and to hopefully put an end to the idea of a Marxist government. Momentum has taken over the Labour Party establishment even though most Labour voters would, I think, much prefer a David Milliband Labour party to a Corbyn, McDonnell, McCluskey one.

Frankly to claim that the Tories have been taken over by an extreme ideology in the way that Labour have is absurd. 52% voted for Brexit (again I didn’t) and one really cannot call 52% of the population ‘extreme’!


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