Brexit, How Will You Invest Next 5 Years

GSP

A thread on this site about Trump made me think of this.
The referendum result was attributed to a rise in transfer values which helped some make a decision to give up their "gold plated" db pensions.

While there is still a lot to play out as regards Brexit negotiations etc, how do people think the next 0-1 year, 1-3 years, 3-5 years will go on investing and what people will do with their money.
Will there be flights to safety investing until things become clearer, or will there be punts with some smaller money that certain areas might grow significantly.

We would all like a crystal ball. What are people's thoughts for the next five years. How might they invest?
Anything to look out for for e.g Interest rates going through the roof and related areas such as annuities taking off. The price of gold going up as its been known investors move money here during uncertainty.
Interested to know how people are thinking, if they will invest differently in the near future.

Linton

What is the link between the referendum result and the rise in transfer values? Most people dont have DB pensions and most of those who do wont have transferred their pensions. Why would this small minority have voted for BREXIT?


I dont know about anyone else, but I have no reason to invest any differently in the next 5 years than in the past 5 years.

cashbackproblems

Havent been investing in UK for a while and wont for the foreseeable, minimal exposure to europe. Post-brexit could actually see a bounce once trade rules are finalised, currently values of companies like barclays are massively undervalued

Thrugelmir

GSP wrote: »

The referendum result was attributed to a rise in transfer values which helped some make a decision to give up their "gold plated" db pensions.

Starting point was the Great Financial Crash of 2006-2008. A combination of low interest rates, quanative easing along with multiple central bank iniatives since. Has pushed investors into chasing equities for income (and correspondingly capital gain). As both bank deposit rates and fixed interest stocks yielded lower and lower returns.

Years later QE has all but ceased. The US Fed is in reversal mode. BOE is in holding mode. ECB is on the cusp of moving into holding mode. BOE lending initatives likewise are starting to be repaid by the UK's lenders.

The tide is going out so to speak. One era has ended and another is commencing. No historical precedent for QE reversal. Interesting times lie ahead.

What's your own investment style?

dividendhero

I'm going to put my entire life savings into those new 50p Brexit coins

dunstonh

The referendum result was attributed to a rise in transfer values which helped some make a decision to give up their "gold plated" db pensions.

Not seen that claimed anywhere before. it sounds like one of the many "blame Brexit" myths

How does the referendum result explain the rise in transfer values in the years before the referendum or the fall in transfer values (in general) over the last year?

While there is still a lot to play out as regards Brexit negotiations etc, how do people think the next 0-1 year, 1-3 years, 3-5 years will go on investing and what people will do with their money.

It makes no difference whatsoever. Brexit is mostly playing out on the exchange rate and if its bad, global equities revalued against sterling will rise and UK equities fall. If its good, then UK equities will rise and global equities will fall (ignoring all the other far more important influences that exist).

bostonerimus

dunstonh wrote: »

Not seen that claimed anywhere before. it sounds like one of the many "blame Brexit" myths

How does the referendum result explain the rise in transfer values in the years before the referendum or the fall in transfer values (in general) over the last year?


It makes no difference whatsoever. Brexit is mostly playing out on the exchange rate and if its bad, global equities revalued against sterling will rise and UK equities fall. If its good, then UK equities will rise and global equities will fall (ignoring all the other far more important influences that exist).

If the UK investor is globally diversified Brexit might actually see the value of your DC pension and ISA go up as Sterling falls. The biggest issue for UK residents might be inflation and a spike in unemployment, but that's just me speculating. So stick with a globally diversified portfolio and have a plan to cut your spending if inflation rises so you can maintain the level of your saving and investing.

Rising interest rates and uncertainty might cause a resurgence of annuities, but the BoE might also hold rates down if it sees UK growth being constricted by Brexit issues. All this probably argues for a strong stomach to stay invested and a good cash cushion in a savings bond ladder to keep up with inflation and to keep you sane.

sevenhills

Thrugelmir wrote: »

Years later QE has all but ceased.

While the U.S. Federal Reserve has already started this process, the BoE still maintains a 435 billion pound ($576 billion) target for its stock of British government bonds bought through this stimulus, known as quantitative easing (QE).

It also holds 10 billion pounds of corporate bonds that it purchased to help the economy through the shock of the 2016 Brexit vote.
The BoE now says it plans to wind down its asset purchases when interest rates reach around 1.5 percent, compared with previous guidance of around two percent.
June 21, 2018


https://uk.reuters.com/article/uk-britain-boe-stimulus/bank-of-england-brings-forward-potential-timing-of-qe-bond-sell-off-idUKKBN1JH2A4

GSP

Linton wrote: »

Most people dont have DB pensions and most of those who do wont have transferred their pensions. Why would this small minority have voted for BREXIT?.

Hi Linton. I said some would have transferred their db pension. They would not have voted for Brexit to achieve a higher value, they would not know this would happen.

Thrugelmir

sevenhills wrote: »

While the U.S. Federal Reserve has already started this process, the BoE still maintains a 435 billion pound ($576 billion) target for its stock of British government bonds bought through this stimulus, known as quantitative easing (QE).

Amongst other support measures. BOE has also provided mortgage lenders with £127 billion of cheap funding. Scheme ended on the 28th February 2018. Banks have 4 years to repay money drawn down. BOE estimated that at the then borrowing rates this will cost the banks some £800 million. A cost that will be borne by borrowers. Already there are incremental nudges upwards in savings rates. As lenders offer market leading rates to attract savers deposits.

The wind has finally subtlety changed direction.

Thrugelmir

bostonerimus wrote: »

The biggest issue for UK residents might be inflation

Likewise the US and Europe. An era of QE might have a sting in the tail.