Effect of the election on the FTSE

El_Selb · 13 February 2015 at 10:41AM

Obviously there's going to be some market turbulence around election time, but I read somewhere this week that the trend will tend to be downwards, whoever wins. Apparently there's an old adage 'sell in May and stay away' (although probably better to sell in April this time round).

Thoughts?

Should I be thinkig about selling my 250 holding and re-purchasing later in the year?

ColdIron · 13 February 2015 at 10:52AM

If you are investing for the long term it shouldn't concern you at all beyond maybe an opportunistic top up. If you want to speculate on short term market movements then you are not investing

enthusiasticsaver · 13 February 2015 at 11:00AM

I don't reckon there will be a massive up or down movement in May unless we receive a totally unexpected result. Surely the stock market will be building expected conclusions of which government we will have in before May?

I have a large lump sum maturing in early May from a matured cash isa and am looking to move that into stocks and shares and nothing I have read yet convinces me I should wait but I will be watching up until then and make a decision.

I asked a similar question a month or so back and someone pointed out there will always be elections somewhere in the world. Invest overseas if you are worried.

ColdIron · 13 February 2015 at 11:21AM

This article illustrates why global events are far more likely to impact UK markets than the election, however Miliband is no Blair and you don't need a degree to see things not playing out well for energy or financials

http://www.hl.co.uk/news/investment-times/2014/12/election-fever

In the words of Harold Macmillan - Events, dear boy, events

longleggedhair · 13 February 2015 at 12:09PM

Longer term a Milliband Labour government will obviously spell financial disaster for the UK economy as all Labour governments do. So a Labour victory in my opinion will be the most negative for investors. The only way to stop that is to make sure we all get out on polling day and vote Conservative, I certainly will be doing so.

dunstonh · 13 February 2015 at 12:47PM

Historically, the UK stockmarket underperforms during Labour Governments. Socialist policies tend not to go well with capitalist principles. However, today, the markets are more global. That said, there is much opinion that the markets are pricing in the election outcome not being favourable for the UK. An outright Conservative win is the most desirable. A Conservative led coalition is not ideal but would pass. An outright win for Labour would not be the worst option. That would be a Labour run coalition propped up by the even more socialist SNP.

The UK has other issues that are likely to influence it more though. Other economies are catching and projected to pass the UK on growth. So, the UK will move from being very attractive to being one of many achieving growth with others doing it better. A lot of the austerity measures were slowed down or put on hold/delayed. So, the impact from that is going to come.

Trying to time the markets on an event that is 3 months away is rather foolish.

Archi_Bald · 13 February 2015 at 12:55PM

longleggedhair wrote: »

So a Labour victory in my opinion will be the most negative for investors.

I can imagine one even more disastrous outcome: a minority Labour Government which relies on SNP support. We'll all be doomed then, but luckily only for 5 years at the most.

I still have hope it won't come to it.

longleggedhair · 13 February 2015 at 1:06PM

Archi_Bald wrote: »

I can imagine one even more disastrous outcome: a minority Labour Government which relies on SNP support. We'll all be doomed then, but luckily only for 5 years at the most.

I still have hope it won't come to it.

It's a frightening thought, lets hope and prey it does not come to that. It would be an unmitigated disaster.

TheTracker · 13 February 2015 at 1:08PM

I tend to think the influence of governments on markets and macroeconomics is considerably less than they claim it to be (they tend to only claim in one direction, note. Economy booming - that's my influence. Economy's tanking - that's external influence.). So although I have some strong political views, and strong economic views, I don't base my political choices on direct economics much at all. I realise that is very out of lockstep with the populace and how they (are said to) vote.

What the market likes is stability. As we see around the world, that means a stable despot is more likely to survive than a firebrand liberalist. So in terms of the election I'd expect at most some increased volatility before the election that lasts until a stable government is formed. I don't expect it to soar/tilt based on who comprises that government unless it is not a stable coalition.

I've lived through enough ideological changes of government to determine it really doesn't matter that much. Companies and business run the country, politicians just change some of the road rules.

Money where my mouth is, I plan on contributing my full tax wrapped allowance of 55k (40 SIPP, 15 ISA) between April 6 and April 30, and some outside the wrappers in a similar timeframe.

JohnRo · 13 February 2015 at 1:22PM

The central banking politburo and their TBTF clients are the ones running markets, they're the ones to watch.

Glen_Clark · 13 February 2015 at 1:26PM

The election is almost irrelevant compared to the underlying problem of debt fuelled consumption - the National Debt having more than doubled since Osborne took charge - more than in the 300 years before him. Yet still he is throwing out pre election give-aways like the over 65 bonds (because they are the group most likely to vote)

Effect of the election on the FTSE

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