Brexit and investments

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surreysaver
surreysaver Posts: 4,105 Forumite
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in Savings & investments
So, is people's assumptions that Brexit will cause the pound to drop in value compared with the Euro? If this is the case, would it be worth increasing the money I invest in Europe?

For example, within my S&S ISA, I invest in a European Index Tracker. Would I be wise to increase the amount of money I put in this each month?
I also invest in Mintos P2P. Should I increase my investment in that?
Would be it worth just obtaining some Euros?

But then I suppose the pound could increase in value compared to the Euro. What are others' thoughts?
I consider myself to be a male feminist. Is that allowed?

Comments

  • sorcerer
    sorcerer Posts: 878 Forumite
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    I would say you are a year to late, the pound already fell against the Euro. If you invest now you will be paying 20% more to invest because you have to convert your Pound to Euro's.
  • surreysaver
    surreysaver Posts: 4,105 Forumite
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    sorcerer wrote: »
    I would say you are a year to late, the pound already fell against the Euro. If you invest now you will be paying 20% more to invest because you have to convert your Pound to Euro's.

    So not likely to fall much more, then? You think it may have levelled out?

    And looking at the prices of the units, they've gone up by a third since the vote!
    I consider myself to be a male feminist. Is that allowed?
  • System
    System Posts: 178,093 Community Admin
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    sorcerer wrote: »
    I would say you are a year to late, the pound already fell against the Euro. If you invest now you will be paying 20% more to invest because you have to convert your Pound to Euro's.
    Yes, I did check the date of this post!
  • Vaskor
    Vaskor Posts: 12 Forumite
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    My personal opinion is that currency markets go up and down anyway depending on interest rates, trade surpluses and deficits and other economic, commercial and speculative factors. The Brexit vote caused a sharp one-day fall, but it was part of a longer term down trend anyway, if I look at a chart of the GBP/EUR rate. This downtrend has leveled off now, and there has been no long term change since around October 2016. Therefore, I am inclined to think that there wouldn't be any particular further fall due to Brexit.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    I think the Pound wont do well in the short term, say next 5 years, and as a result am invested globally with perhaps 5% in the UK. Even if Sterling improves that doesn't mean my shares wont do well, just less well, but thats swings and roundabouts it fluctuates all the time, i can recall years back a colleague from the US coming over and going on a shopping spree as the rate was nearly 1:!.

    My theory is, it will get worse, but if it doesn't and the UK/Sterling does well , first thats good for me anyway, and second its likely the rest of the world economy would be doing well in that case since the UK is hardly likely to prosper whilst everything else falls.
  • username12345678
    username12345678 Posts: 283 Forumite
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    There is a small (but significant) possibility of second referendum leading to the UK remaining in the EU.

    If this were to happen would it reasonable to expect a marked strengthening of the pound against the Euro?
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    I would say so, yes.

    I dont think there is any chance associated with the word "significant" though.
  • Alexland
    Alexland Posts: 9,653 Forumite
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    As a result of Brexit we have seen sterling fall relative to most currencies so there is no reason to invest in Europe. A global equity fund should provide better diversification and the same FX exposure you are seeking.

    Markets tend to overreact to uncertainty and then settle as a common understanding develops. So while sterling may have further to fall there is also the possibility it will improve. For now I would go 50:50 on sterling in the medium term.

    Alex
  • Linton
    Linton Posts: 17,162 Forumite
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    Nobody knows what will happen, same as any other future event. Best therefore to invest in a way that ensures that whatever happens your portfolio won't be too badly hit. In this case as in all others, keep your geographic allocation well diversified. I suggest less than 20% of your portfolio in any one of UK, W. Europe, Japan, and EM and arguably less than 40% for the US.

    Having fixed your allocation you can leave the current and future uncertainties to resolve themselves.
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