Wait until Brexit to invest lump sum?

spock007

I know it's not a good idea to time the markets but I have approx £25k to invest for myself and another £20k for step-daughters. I was going to add to existing S&S ISAs which are managed for us but I'm wondering if we're better waiting until any sort of Brexit decision first or not. Thoughts?

bowlhead99

Presumably your ISAs will have a mix of UK and foreign investments. A 'bad' Brexit could have negative consequence for the UK assets - but assuming in that situation the pound would weaken, it would likely give you a good result for your overseas assets in that scenario because overseas assets would be worth more pounds, as the pounds are worth fewer dollars or yen or euro etc.

While conversely a 'good' Brexit (or no Brexit) going better than expected for the UK economy, would make the UK assets relatively more valuable than they are today, but the stronger pound would mean all your global investments were worth fewer pounds each.

So however Brexit gets resolved you would expect some movement in different parts of your portfolio one way or another. And as it might be a bit of a coin toss how everything shakes out, you will probably on average feel some disappointment no matter what you do.

And even once 'resolved' Brexit will take a while to fully happen and for the consequences to be felt to the fullest. Then there will always be some other economic event on the horizon to be nervous about, so you might never get round to investing...

If you are concerned, why not just invest half now while there is no final decision and the other half afterwards when you know what happened and the prices already moved in your favour (or to your detriment).

*Ah ColdIron you beat me to it: great minds and all that

Malthusian

spock007 wrote: »

I know it's not a good idea to time the markets

Then you've answered your own question.

Unless you're planning to invest the whole lot into UK-focused smaller companies (which would be daft) it's an irrelevant local news story when you're wearing your investor hat.

ColdIron

In the short term if we get an unmanaged exit, any non-sterling assets you already hold will rise in value due to sterling depreciating but become more expensive to buy afterwards, fewer shares or units for your weakened pound. If we get a managed exit sterling should appreciate so existing non sterling assets will fall but become cheaper to buy. If you can predict with any accuracy which way it will go then you're a better man than me. Maybe split it before and after?

You should also use the search function, there is no shortage of brexit discussion and they all follow the same theme. No one has a crystal ball

At the end if the day it's a gamble, yer pays yer money and takes yer choice

spock007

Thanks, all - I'm just going to put it all in... here we go!

steampowered

My feeling is that the Brexit mess will continue rumbling for some time. Even if a no-deal happens there will then be political debates about future deals that will rumble on.

As you are investing for long term, short term volatility is not the end of the world.

I think you just have to trust that markets will have already priced in the risks and possible upside/downside of political issues.

Thrugelmir

The trade war between the USA and China is going to start to bite into Corporate earnings at some point in time. Far bigger issue than Brexit. Economies globally are slowing down. The UK is far from alone.