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  • FIRST POST
    • surreysaver
    • By surreysaver 14th Jul 17, 3:27 PM
    • 2,248Posts
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    surreysaver
    Brexit and investments
    • #1
    • 14th Jul 17, 3:27 PM
    Brexit and investments 14th Jul 17 at 3:27 PM
    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?
Page 1
    • sorcerer
    • By sorcerer 14th Jul 17, 3:38 PM
    • 806 Posts
    • 383 Thanks
    sorcerer
    • #2
    • 14th Jul 17, 3:38 PM
    • #2
    • 14th Jul 17, 3:38 PM
    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
    • By surreysaver 14th Jul 17, 3:39 PM
    • 2,248 Posts
    • 1,273 Thanks
    surreysaver
    • #3
    • 14th Jul 17, 3:39 PM
    • #3
    • 14th Jul 17, 3:39 PM
    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.
    Originally posted by sorcerer
    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?
    • Economic
    • By Economic 14th Jul 17, 4:02 PM
    • 111 Posts
    • 68 Thanks
    Economic
    • #4
    • 14th Jul 17, 4:02 PM
    • #4
    • 14th Jul 17, 4:02 PM
    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.
    Originally posted by sorcerer
    Yes, I did check the date of this post!
    • Vaskor
    • By Vaskor 14th Jul 17, 4:06 PM
    • 11 Posts
    • 6 Thanks
    Vaskor
    • #5
    • 14th Jul 17, 4:06 PM
    • #5
    • 14th Jul 17, 4:06 PM
    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
    • By AnotherJoe 14th Jul 17, 4:07 PM
    • 7,244 Posts
    • 7,755 Thanks
    AnotherJoe
    • #6
    • 14th Jul 17, 4:07 PM
    • #6
    • 14th Jul 17, 4:07 PM
    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
    • By username12345678 14th Jul 17, 4:08 PM
    • 114 Posts
    • 48 Thanks
    username12345678
    • #7
    • 14th Jul 17, 4:08 PM
    • #7
    • 14th Jul 17, 4:08 PM
    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
    • By AnotherJoe 14th Jul 17, 4:45 PM
    • 7,244 Posts
    • 7,755 Thanks
    AnotherJoe
    • #8
    • 14th Jul 17, 4:45 PM
    • #8
    • 14th Jul 17, 4:45 PM
    I would say so, yes.

    I dont think there is any chance associated with the word "significant" though.
    • Alexland
    • By Alexland 14th Jul 17, 11:21 PM
    • 247 Posts
    • 130 Thanks
    Alexland
    • #9
    • 14th Jul 17, 11:21 PM
    • #9
    • 14th Jul 17, 11:21 PM
    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
    • By Linton 15th Jul 17, 5:24 AM
    • 8,208 Posts
    • 8,082 Thanks
    Linton
    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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