The UK general election is fast-approaching.
With all the political parties canvassing across Britain, we take a look at the possible investments that could be made, before or on June 8.
Is it possible to make any money from the UK general election?
When Conservative Prime Minister Theresa May announced a snap general election on April 18, the FTSE 100 lost 2.5% of its value. Not a good sign?
Surely a pro-Brexit PM is good for the European stock markets? No, apparently, as traders panicked.
It wasn’t only the traders.
The uncertainty over Brexit and Britain’s standing in Europe post-Brexit has clouded the European markets since June last year, and now with a general election on the horizon, should UK investors be avoiding the stock markets, sterling and the UK property market altogether? What did investors do in the run up to previous general election in the UK?
One of the UK’s biggest stockbrokers Hargreaves Lansdown says: “Ahead of the UK election in 2015, investors withdrew £2.7 billion from UK equity funds, but as the country prepares to go to the ballot box once again, our analysis of historical returns shows that observing the old stock market proverb of ‘selling in May’ can cost you money, lots of money.”
Ahead of the UK election in 2015, investors withdrew £2.7 billion from UK equity funds
Senior analyst at Hargreaves Lansdown, Laith Khalaf says: “Election fever could be a costly ailment if it prompts investors to follow the old proverb which recommends selling up in May and going away. Chances are this strategy will cost you valuable returns…Trying to time the market is never advisable, even less so based on groundless superstitions.”
If staying put with your current investments in the stock market, is a credible strategy, then perhaps looking to for well-known funds with global exposure could be another one.
Andy Parsons, head of investments at Share Centre explains that the majority of UK investors “put their faith in established and trusted managers who have proven track records through a variety of economic and market conditions”, after the announcement of a snap general election on April 18.
Parsons says the two funds run by star fund manager Neil Woodford proved popular with UK investors in April – the CF Woodford Income focus fund topped the list, whilst the CF Woodford Equity Income Fund followed closely behind.
Other funds exposed to India, sectors like global infrastructure and technology also proved popular with UK investors.
Parsons says: “Continuing the theme of investors seeking specific opportunities, the AXA Framlington Global Technology fund provides investors with an opportunity to benefit from this ever changing landscape – from cars to healthcare, communication to banking and manufacturing.
Overall, it is important to “hold your nerve” in the run up to the election on June 8.
Any rash moves – whether selling your entire stocks & shares portfolio, investing in sterling rather than the euro or disposing of your buy-to-let property empire could result in more money being lost than made in the long-term.
Disclaimer: The content on this page does not constitute financial advice and is provided for general information purposes only. Nothing on this page should be regarded as an offer to conduct investment business or to buy/sell any investment.