Investing large sum prior to brexit date?

dilby

Hi all -

I've recently come into some money and was planning on putting a chunk into my pension pot (around 15-20k). I know this is INCREDIBLY subjective, but I was hoping to get some measured opinions on the timing of doing this before the end of october, and whatever-the-heck-happens here in the UK. Clearly we don't know what will happen, but given the fact that markets will respond either way because its change whatever happens, I'm wondering if it's a stupid thing to do, or actually its the perfect time?

Not going to form an opinion on one comment alone don't worry and I know its just conjecture, but just curious to see other's thoughts!

Thanks so much!

NedS

Impossible to answer as no one is able to reliably predict the future, so you'll only likely receive subjective opinion at best.


How about pound cost averaging - invest a proportion monthly over the next 12-18 months, maybe £1K per month (or £250 per week) to average out the costs and reduce the risks.

SonOf

. Clearly we don't know what will happen, but given the fact that markets will respond either way because its change whatever happens, I'm wondering if it's a stupid thing to do, or actually its the perfect time?

UK is 4% of global GDP and under 1% of that is linked to the EU.

So, why do you think global markets will react negatively to such as small amount?

Most of the Brexit issues have played out in exchange rates. So, every bit of bad news sends most investments up. Not down. The UK market has been sluggish but no sensible investor goes 100% into UK Equity.

cfw1994

I would agree with both the above.....

I would not overly worry about brexit (although I do wonder if we are overdue another downturn more generally), but I would personally tend to drip-feed that kind of sum monthly.
Yes, you might increase transaction costs a little, but you also average out the peaks and any troughs.

If going into a pension pot, then you are also getting some tax advantage anyway, which should help with any troughs suffered!

DairyQueen

Presumably this will be a 10+ year investment? Over such a long period, trying to time the next dip/crash is likely to damage your finances much more than time out of the market.

I never attempt to time the market (no crystal ball in the living room, alas). If I have cash to invest then I spend time deciding where to invest (class/sector/fund) and then I hit the 'buy' button. The 'when' doesn't enter the equation.

At the very least, fill-up the pension scheme asap as contributions will receive an immediate uplift courtesy of the tax man. Keep it in cash for a period if you must. Drip feed if that feels right to you, but don't ever try to time any sector of the market.

Agree with SonOf's analysis with respect to the size of the UK market and the impact of Brexit in particular.

[Deleted User]

Slightly disagree with the preceding advice.

There is scope for Brexit to poison the economic outlook of the whole world quite soon after Halloween. The Brexit-headbangers are now the UK Govt, and many of their ilk are quite open in intent to renege on the bill agreed with the EU. It doesn't help that their patrons are disaster-capitalists.

People can see a train when it is coming.

Or can they?

Many in the UK are still oblivious to the fact that their families are poorer in the world because of the depreciation of sterling.

The main thing is to be as liquid as you can now.
That means taking control of your pension.

crv1963

My take is feed it in over a period of months, planning a similar exercise myself for an unexpected 10k. I'll feed it in 2.5k per month.

As for Brexit, I agree with the comments that in the global markets it has already been priced in. It seems a big issue because it is all over our news coverage, we have a view that we're a bigger player or more important than we are. The impact will be local to the UK good or bad. The impact will be short term for others.

DairyQueen

ZingPowZing wrote: »

There is scope for Brexit to poison the economic outlook of the whole world quite soon after Halloween. .

You have a very exaggerated view of the the UK's importance.

What happens in the US economy is of global significance. The UK's local issues barely warrant a few lines in the financial pages of the global media. Brexit will impact individual EU economies to varying degrees but still not that significant to the EU as a whole.

If you are that 'liquid' simply because of Brexit then your portfolio is not sufficiently diversified.

I am beginning to understand why HL were so negative about your DB transfer.

westv

Last week the Fed cut interest rates. Reasons given weree threats to the global outlook including a no deal Brexit.

[Deleted User]

It is not an exaggerated view of the UK's importance that is likely to spook the market so much as a reaction to it reneging on a bill already agreed by a previous Govt.

Brexit is a lose/lose for both UK and EU but particularly the UK, hence the biggest one-day fall of any major currency since fixed-rates on 24/06/2016. That morning, Brits woke up as the poor relations of the internet, their £ worth less than other currencies. Since then the decline has continued - because of Brexit - and it decimates the value of their houses, pensions, salary and savings against 99% of people in the world.

There were measures then and measures now to mitigate the damage to the wealth of your family - but it won't happen by "drip-feeding" your investment into a diversified range of investments. All that does is average out your loss.

westv

In addition the IMF have stated that a no deal Brexit is one of the key risks to the global economy.

https://www.bbc.co.uk/news/business-49074923