Investments and the Election

jimjames

Borrowedtune wrote: »

Woodford must be a naïve and inexperienced investor then...

http://www.hl.co.uk/news/articles/election-thoughts-from-neil-woodford

Where is he suggesting selling out before the election? It's not on that link.

dunstonh

Borrowedtune wrote: »

Woodford must be a naïve and inexperienced investor then...


http://www.hl.co.uk/news/articles/election-thoughts-from-neil-woodford

And nothing in that marketing article suggests anything to back up your view. Indeed, it supports exactly what I said and what others have said on this thread and the other threads on the same subject. i.e. UK issues are largely known and its global issues that are the key drivers.

bowlhead99

As I mentioned on another one of these threads, it's quite possible that the share prices will move around a bit with a new government (and perhaps doubly so when we have days or weeks of wrangling and negotiating to see who is going to partner with whom, if necessary). The only reason you get paid for owning shares is because you are taking risks. If you opt out of wobbles, you are choosing cash over something that can produce a sharp loss or a quick return. Or a slow loss or a long return.

Generally you don't know when these periods will be, over the next man. Domestic shares may rise 10% as soon as it's clear that the uncertainty has been removed over who will form the government, even if it isn't a business friendly government or a pro EU government or whatever. Or overseas shares may become more valuable due to a sterling weakening. Or any number of things. If you opt out of getting involved in that, then come back in to take the losses that drag the rest of us back down to only a few percent normal return for a longer period as a whole, you will have lost out compared to everyone else.

In order to get to the long term average good return which shares owe you for the risks you take,, you need to get involved in all the ups and all the downs, rather than choose cash each time you think there might be a down. Of course, there is nothing wrong with a person being cautious and having a perceived risky event help focus his mind on the fact that he should not be so heavy in equities and has simply been fortunate in recent years.

bowlhead99 wrote: »

He is a marketing man for his fund business and he's appeared on a fund platform website (which offers a discounted class of his fund on the basis that they can drive enough traffic to him to be worth the discount...

As an aside, it's a bit frustrating seeing HL or fund manager "editorial" slots on HL or trustnet being taken as gospel - not just the fact that people fail to see bias or motivation, but that in the case of HL, people will literally pay 0.2% of their assets every year of their life in excess of what other DIY platforms charge, because they really value all the "free research" which helps them with their investment choices.

The linked piece from Woodford contains nothing of value, no market sensitive information, and certainly does not suggest that you disinvest. And yet it's probably trumpeted as an insightful exclusive interview with a celebrity star manager and a real value add which is worth the premium platform fee! And then people read it and say "investment guru says the market is going to be rocky, that supports my assertion to sell everything."

Takes all sorts to make a world I guess...

Borrowedtune

dunstonh wrote: »

And nothing in that marketing article suggests anything to back up your view. Indeed, it supports exactly what I said and what others have said on this thread and the other threads on the same subject. i.e. UK issues are largely known and its global issues that are the key drivers.

I think you may be putting words into his mouth. What he says is:


I believe there can only be instability after the general election. Can you, for instance, expect Scotland to be part of the UK if the SNP is supporting a minority Labour administration? What will happen to Britain's membership of the euro zone? These are big uncertainties that I do not believe will become that much clearer after May 7. You have to be wary as an investor against such a backdrop. (emphasis added)


I find little to disagree with there.


FWIW, I have no current plans to change my portfolio allocations before the election. I do however think there is now political risk in the UK in the way we haven't seen since the 70s, in that there is a possibility of a business and markets unfriendly government.


In that case it would be unwise - in my view - to claim that there aren't any significant uncertainties. Apologies if that is not an accurate view of your position, but that is how I interpret the comment that "the election is known".


Apart from the date, it isn't.

WatsonNimrod

Depends where you are invested, I have been slowly selling UK equities to buy funds over the last few years constructing into a safe (hopefully) diverse global portfolio as I head towards early retirement, not keen on any surprises there. Ive always been more concerned about the markets reaction to uncertainty over an EU referendum and the impact of a no vote. That was the deciding factor in moving away from a high concentration of UK equities.

My personal feeling is that the tone of the election has been a bit negative and Labour are being cast as the anti business part and the SNP are seen as wanting to spend spend spend. I think neither is true but the markets won't like it at all.

In my SIPP however I've taken a different approach and continue to invest in value stocks because even if there is a blip the wheels of industry won't fall off for ever and for sensible companies with good balance sheets life will go on pretty much as before and there will be bargains to be had if the markets overreact. Some say we need a correction anyway.

enthusiasticsaver

No, in fact I have just filled out a cash isa transfer form into stocks and shares as my fixed rate cash isa matures this Saturday and I am moving it. The Vanguard LS funds though do not carry a significant amount in the UK and I think the stockmarket has already factored in a hung parliament. Most large investors know the score. I do not really mind if it goes down around the time of the election anyway as that is when the purchase will take place. In the grand scheme of things we are a small country and so long as you are not investing totally in the UK it should not matter. I am more concerned about the US raising interest rates in June as the Vanguard funds do lean more towards the US as obviously it is a larger economy. I don't need access to the money in the next seven to ten years though.

Thrugelmir

Zippeh wrote: »

I realise this might be a bit of a novice frame of mind, but is anyone considering cashing out their uk based shares or funds before the election?!

Personally I would avoid sectors that Milliband has singled out for a lashing.