Markets unfazed

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Legacy_user
Legacy_user Posts: 0 Newbie
in Savings & investments
I know it'd be wrong to say that trump and brexit had no effect on the markets, but it certainly seems far more mute than you'd expect for all the political emphasis, and far more than the credit crunch or a rates change

Does this mean the effect of politics and trade deals on equities as a whole is quite minimal compared to monetary policy?
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  • Linton
    Linton Posts: 17,245 Forumite
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    The market hates uncertainty. There was uncertainty before we knew the result of the election because no-one knew who would win and what Trump would do if he did win. There is still uncertainty as no-one knows what Trump will do now that he has won. So nothing has changed. If Clinton had won there would have been a large rebound.
  • System
    System Posts: 178,104 Community Admin
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    Why do they hate uncertainty when they seem fairly neutral about the actual outcomes? You've thought there's be a firm material difference in valuations as investors reconsider the outlook for companies, something either beyond the ranges of uncertainty or on the edge of it. I can see how there's be more volatility with uncertainty but to me it looks like actual valuations just operate in a range between two outcomes
  • Linton
    Linton Posts: 17,245 Forumite
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    A general tendency....

    If there is a major uncertainty around people tend to wait to see what happens before buying. However there are always forced sellers. So prices go down. When the uncertainty is resolved all those waiting to invest jump in. It doesnt matter too much how the uncertainty is resolved - there is always money to be made.
  • Pincher
    Pincher Posts: 6,552 Forumite
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    What would you do if you had

    £1million

    £10million

    £100million?

    Take a relaxed attitude?
    Easy come, easy go?

    I would really love it if somebody would give me £100million,
    so I can just spend it, and not bothered about investing it.

    Bill Gates, adopt me, please.
    For £100million, I will call you DADDY. :cry:
  • System
    System Posts: 178,104 Community Admin
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    Pincher - whack it in an 100%equity index tracker, treat it the same way you'd treat £1k, buy and hold and wait out crashes
  • darkidoe
    darkidoe Posts: 1,125 Forumite
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    The effect of a Trump win may already be priced into the markets. Similarly for Brexit. It's the uncertainty of the outcome that makes the markets more volatile prior to the elections/referendums.

    Save 12K in 2020 # 38 £0/£20,000
  • Pincher
    Pincher Posts: 6,552 Forumite
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    MatthewAinsworth wrote: »
    Pincher - whack it in an 100%equity index tracker, treat it the same way you'd treat £1k, buy and hold and wait out crashes

    But that's precisely what gets people into a huff about.

    Well, some gold bars in a bank vault, and a Renoir or two that I can insure.
  • System
    System Posts: 178,104 Community Admin
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    Darkidoe - you'd expect the possibly of both Clinton and trump at the time to be priced in somewhat, you'd expect the uncertainty price to be somewhere between the two outcome prices, unless the volatility puts off margin traders and that explains why either outcome gets a higher value.

    Pincher - how come? And I think a lot of investors don't have the faith that they should have in the long term recovery of the market, and too many try to time the market, and too many need early access.
    I will take insuring measures towards drawdown
  • savings_my_hobby
    savings_my_hobby Posts: 363 Forumite
    edited 10 November 2016 at 7:43AM
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    Linton wrote: »
    The market hates uncertainty. There was uncertainty before we knew the result of the election because no-one knew who would win and what Trump would do if he did win. There is still uncertainty as no-one knows what Trump will do now that he has won. So nothing has changed. If Clinton had won there would have been a large rebound.

    There will uncertainty tomorrow because we may not live to see it and there will be uncertainty the day after and the day after...

    The markets are there to serve people, people should not pander to the markets.
    All this hysteria surrounding the market is hilarious. There will always be investment because investors are addicted to investing.
    Weather it be trump or Roland Rat that got elected... anyway I would have thought the markets would be happy to have a "businessman" in the oval office.
    Earn, Save and Achieve
  • System
    System Posts: 178,104 Community Admin
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    I think its all leveraged day traders when I think about it, trying to avoid a margin call, people who have reason to freak out. Fools for not being passive!
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