Investing before Brexit

msallen

BuildTheWall said:

Prism said:

We are investing for hopefully a good outcome in 10-20 years right? Why does the current exchange rate matter?

This. Don’t change your long term investments on short term market moves. If you have some spare lying around that you want to use on a short term bet, that’s your choice. 

No one has suggested changing long term investments. The OP was talking about investing new cash now, and it seems a legitimate question given that the value of Sterling could make a fairly dramatic move one way or the other in the next few weeks. We have to assume that it will rise on a deal and fall on no deal, but by how much nobody knows, and indeed we don't really know which way the currency markets are currently betting on, or if they are undecided and at a dead central position.

If I was considering investing a sizeable chunk of cash now, I don't know what decision I'd come to, but it could easily make a 10%+ difference to the quantity of non-Sterling denominated stocks I got for my new money.

Perhaps investing half now and half in the new year is the lowest risk option.

Albermarle

Everybody is talking about stocks, currency etc but the OP has a managed fund , so it is fairly good assumption that it will contain a mixture of different investments ( not 100% shares) in a mixture of currencies.
OP - Have you thought about putting more into a pension instead ? In most (not all) cases this is the best way to save for retirement income .

hollie.weimeraner

Albermarle said:

Everybody is talking about stocks, currency etc but the OP has a managed fund , so it is fairly good assumption that it will contain a mixture of different investments ( not 100% shares) in a mixture of currencies.
OP - Have you thought about putting more into a pension instead ? In most (not all) cases this is the best way to save for retirement income .

I am 64 years old and a retired Police Officer with a full Police pension.  I have worked for the Environment Agency for 10 years and have a pension with them as well which I will draw in a couple of years so am well catered for in that respect thanks.

Thrugelmir

Steve182 said:

ZingPowZing said:

TBC15 said:

ZingPowZing said:

hollie.weimeraner said:

My investments in a managed fund, have (this week) finally recovered all the losses experienced at the start of the year. I also have a chunk of cash that is earning little or no interest in a number of bank accounts and am wondering whether or not to put it into the investments.  The only concern I have is what is likely to happen in the event of a no deal Brexit?  I know we can't predict what's going to happen but would just like to garner a few thoughts before putting more cash in.

There is only one certainty: in the event of a no deal brexit, sterling - currently $1.30 - will lose value in the world.
So, if you have assets denominated in £, like a house, salary or pension, you could manage that damage by investing in international stocks. 
Stick to the big ones: Aapl, Microsoft, AliBaba.

What makes you think the pound will fall? 

Edit approximately how many bricks will the house be missing? If I was still in work what reduction in my pay would be expected? What reduction in my current pension can I expect?

What makes me think the pound will fall? 
The way £ has performed for the last +4 years on Brexit news; every day confirming the market's judgement on the referendum: Brexit is economic poison. 

How many bricks will tbc's house be missing?
None. He will have the same number, they will just be worth less in the world.

What reductions in my current pension can I expect?
None in sterling terms; again, the£ figure will just be worth less in the world.

Me thinks the pound will fall too. Rate was about $4/pound during WW2, $2/pound 1st gulf war, $1.28 now. maybe $1/£1 about 10 to 15 years from now? That's one reason why 75% of my investments are in $

You omitted the fact that the exchange rate hit $1.08 in 1985.  Not the linear decline you are suggesting. 

Sailtheworld

Thrugelmir said:

Steve182 said:

ZingPowZing said:

TBC15 said:

ZingPowZing said:

hollie.weimeraner said:

My investments in a managed fund, have (this week) finally recovered all the losses experienced at the start of the year. I also have a chunk of cash that is earning little or no interest in a number of bank accounts and am wondering whether or not to put it into the investments.  The only concern I have is what is likely to happen in the event of a no deal Brexit?  I know we can't predict what's going to happen but would just like to garner a few thoughts before putting more cash in.

There is only one certainty: in the event of a no deal brexit, sterling - currently $1.30 - will lose value in the world.
So, if you have assets denominated in £, like a house, salary or pension, you could manage that damage by investing in international stocks. 
Stick to the big ones: Aapl, Microsoft, AliBaba.

What makes you think the pound will fall? 

Edit approximately how many bricks will the house be missing? If I was still in work what reduction in my pay would be expected? What reduction in my current pension can I expect?

What makes me think the pound will fall? 
The way £ has performed for the last +4 years on Brexit news; every day confirming the market's judgement on the referendum: Brexit is economic poison. 

How many bricks will tbc's house be missing?
None. He will have the same number, they will just be worth less in the world.

What reductions in my current pension can I expect?
None in sterling terms; again, the£ figure will just be worth less in the world.

Me thinks the pound will fall too. Rate was about $4/pound during WW2, $2/pound 1st gulf war, $1.28 now. maybe $1/£1 about 10 to 15 years from now? That's one reason why 75% of my investments are in $

You omitted the fact that the exchange rate hit $1.08 in 1985.  Not the linear decline you are suggesting. 

The trend is obvious. It looks more linear when you plot effective exchange rate over time.

I have no idea if this trend is going to reverse any time soon but a messy no deal brexit isn't going to be positive for sterling.