General election and investment timing...

digannio

I've just transferred two pension pots (total around £50,000) into an HL SIPP. For the moment they are going into the cash fund but they will probably mainly end up in something like the L&G Multi-Index 4 Fund.

I know the old saying that you can't time the market but I must admit my inclination is to hang on before I invest until after the election. I just have this feeling that there'll be a complete electoral mess and the spooked UK markets (with fall-out elsewhere) will hit the wall (even if it is just fairly short-term). Or will the UK situation in a well-diversified fund not be such an all-important issue?

I'll probably have this totally wrong and there'll be some giant upward leap in the market and I'll be the numpty left behind.
I just wondered what people's views are. Wait until after the election and see what happens, just take the plunge with the lot now or even feed it in over a period of time. Decisions, decisions.... In fact I think I'm doing a U-turn even as I type and I might as well just bung it all in now and set the ball rolling straight away.

badger09

Election outcome uncertainty already priced in?

digannio

Maybe not if the Monster Raving Loony Party have the balance of power:D

JohnRo

theyre already in power

jimjames

It might have a minor effect on the UK but if you've got a globally diversified portfolio then the impact will be minimal.

ColdIron

In recent history the direct consequence of elections has had limited effect on the markets, global events have more impact. You might find the following interesting

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

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

If you are investing for the long term I'd just bung it in now and be done with it, anything else is, as you say, market timing and you could just as easily get it wrong as right

dunstonh

I know the old saying that you can't time the market but I must admit my inclination is to hang on before I invest until after the election.

The election isnt really an unknown event. It's date has been known for 5 years and the outcome is expected to be a coalition or minority government. Neither is liked by the markets. So, the markets arent suddenly going to react in May.

jimjames

dunstonh wrote: »

The election isnt really an unknown event. It's date has been known for 5 years and the outcome is expected to be a coalition or minority government. Neither is liked by the markets. So, the markets arent suddenly going to react in May.

I guess the one way the markets could react is if there was a majority Conservative government by rising. That would scupper the Op if they're holding out in cash.

So the option that avoids that risk is investing now.

redbuzzard

Accepting all of the usual wisdom about market timing for long term investors, that no period of time is sufficiently exceptional for the usual approach to be ignored...I'd be less concerned about the UK elections than the possibility of a "correction" from here.

I'm not claiming any prescience about this, but (a) equities are close to an all time high; (b) bond prices ditto; (c) any surprises from the Fed on interests rate could trigger contagious pessimism (c) the uncertainty around Grexit might be largely priced in but any worsening prospect of a Euro collapse is far more likely to have global repercussions than UKIP winning he election or a hung parliament with Labour forming a coalition with the SNP!

These are not words of wisdom, just what I think...I wouldn't worry at all about regular savings but dumping a lump sum into high volatility assets in this lot would make me nervous.

I'd be (and am) less nervous with a large weighting towards funds with a focus on capital preservation such including Troy Trojan and AR style holdings generally (Newton Real, SLI GARS, Ruffer IT etc).

It is entirely possible of course that one could be doing that for two years while missing out on some extra growth.

Certainly managers such as Troy and Ruffer are very nervous about sustainability of asset prices and inflation, with significant cash, gold and index linked gilt holdings despite the fact that the latter cost around 1/2% real rate of return to hold.

Just saying.

Fire away!

MarkBargain

jimjames wrote: »

I guess the one way the markets could react is if there was a majority Conservative government by rising. That would scupper the Op if they're holding out in cash.

A Conservative government would mean an EU referendum in 2017 (or this year if UKIP get their way) with all the uncertainty that would bring to the markets.

Personally, I try to drip feed investments on a monthly basis over a long period of time to avoid worrying about short term volatility.

EdSwippet

redbuzzard wrote: »

... (a) equities are close to an all time high;...

Maybe nominally, but not in real terms:

http://www.theguardian.com/business/2015/feb/24/ftse-100-hits-record-high-of-6959-greece-eurozone

"If the 1999 high is adjusted for inflation, the value of the FTSE 100 index would need to be 10,700 in 2015 to be at an all time high."