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EU / US elections and safeguarding long term investments


Digsy

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Just wondering what people on here are doing (if anything) to protect their long term savings and investments during the upcoming EU referendum / US elections in case the stock markets go down the rabbit hole for a while.

 

I have a significant portion of my long term savings in an equity ISA. Nothing earth shattering but not something I would want to lose. I've been tracking the growth for 20 years and it has stabilized out at about 5% growth per year and stayed steady for the last 5 years. In recent years I've had one big blip which took 30% off the total value and took 2 years to recover and another smaller blip which took 10% off the value and recovered within a year. I'm thinking that something like this could happen again in the near future.

 

For people who like the details, the units are spread over three different funds which are rated as "medium risk" (5 out of 7 risk / reward rating). I can withdraw the funds instantly with no fees.

 

I was doing some calcs and I reckon if I do nothing and we have another "big blip" (worst case scenario) it could cost me about £15k between now and when I retire. That's comparing to the projected growth if nothing bad happens and growth carries on at about 5%. The best case scenario is that I pull my savings out and we have a crash, and then I re-invest right before the recovery starts. I reckon that could gain me nearly £15k in the long run.

 

I figure the potential risk of staying in outweighs the penalty of taking my money out for a couple of years and putting it somewhere where it won't grow as fast, so I am more or less decided on this course of action.

 

I know there are a few financial people on here so wondering what others are doing?

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Is not swapping it out to a cash isa a temporary option? Perhaps some precious metal holding paper or even physical? They can do well when everything else heads south?

 

I'm no investment guru at all but there is a chance fear/uncertainty has already been factored in and a 'in' vote could see an immediate pickup in the stocks just as easily as an out could cause a drop?

 

I feel I should get into share Isa's but haven't got round to it yet and fear a Sod's law immediate blip when I do go in!

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Is not swapping it out to a cash isa a temporary option? Perhaps some precious metal holding paper or even physical? They can do well when everything else heads south?

 

I'm no investment guru at all but there is a chance fear/uncertainty has already been factored in and a 'in' vote could see an immediate pickup in the stocks just as easily as an out could cause a drop?

 

I feel I should get into share Isa's but haven't got round to it yet and fear a Sod's law immediate blip when I do go in!

 

I will definitely swap out for something. I am planning to take the money out tomorrow, having got a valuation today. However I will probably get the unit price from Monday's trading though so not sure if trading over a weekend is a smart move in case the markets open low. If things stay relatively steady I will probably re-invest again sooner. Hopefully I will be able to find a fund with low or zero entry fees, or I may do something altogether different.

 

I've had some money in equity for decades as this all started out as a failed PEP mortgage. The values were up and down like crazy over the first few years, so much so it was impossible to gauge what the true long term growth was. It was supposed to average out at 7.5% over 25 years in order to pay off the mortgage. As I said above it has actually fallen short by about 2% after 20 years (good job I went back to straight repayment when I bought my ex out of her half of the house).

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A close friend is very into his stock and shares, we sometimes chat but it goes a little over my head at times and seems a bit of a gamble whatever you do. Seems counter intuitive to me that everyone says 5 ish % gains are possible when base rates are so low and unsecured personal loan rates are almost the same?

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The gains you make on stocks and shares can come in two ways, either through price change or dividend. If your building an income portfolio you look for good dividend based stocks, you dont worry too much about the fluctuation in unit price as the dividend should cancel it out and still leave you in profit, obviously this isnt the case during a crash which is the ideal time to buy / top up :D

 

With a well planned dividend portfolio you can have payouts every month, if this is all locked in a stocks and shares ISA its tax free and the cash paid back into the ISA from the dividends can then be reinvested, I think the correct term is compound investing / saving.

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Bit of diversity doesn't hurt. That way if something tanks it doesn't take all your savings with it. Very nearly impossible to say which one thing will come out of an uncertain market intact. I am not a financial advisor though :D

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Everyone has there own way of looking at this, me personally, I'm cashing out, dropping money into a savings account and hoping for a crash :)

 

Crash is inevitable and long overdue

 

 

Ideal for picking up some cheap shares :D

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The markets seem to be up a bit today and I have missed the deadline for shouting "SELL! SELL!! SELL!!!" today, so I will wait until Monday in case there is some profit-taking before the end of trade or when the markets open next week.

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Crash is inevitable and long overdue

 

 

/QUOTE]

 

I reckon that 2017 will bring a number of geo-political challenges that will create an adverse effect on the value of stocks & shares, I.e. a natural adjustment like what Imi is inferring. That being said, the exit of the UK from Europe may cause a short blip but it ain't really going to change the price of fish. The European debate is important to us Brits but in the whole scale of things it's just one other global issue for the markets to deal with.

 

I'm not worried one bit regarding the European piece.

 

The Donald debate could be something quite else though.

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I was told by an investor that oddly in a time of crisis buying shares in strong and stable businesses is a good long term idea - because those businesses will weather the storm and return to value eventually.

It's an interesting thought.

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Always put my investment in properties as I know it will always come good and I like the buying and selling as the market changes. When things go a bit stale in the UK I just look into the foreign markets, a bit scary at first but you soon get used to it and that's part of the fun, well it is for me.

The euro debate is certainly shaking things up and squeezing peoples bum cheeks so it's got me doing the same as you in a way OP and looking as to where my investments are going to be best placed. I'm enjoying the uncertainty and searching, got to keep busy somehow. :)

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There have been links to a couple of articles on Yahoo Finance suggesting that selling up in the run up to the refferendum is the wrong thing to do, as the long term impact on the markets will be small, however some of these refer to short to medium term investments whereas I've been "in" for 20 years, so I think I have something to lose.

 

I'm just picking my moment to say "Aahm oot", but the FTSE100 is currently on a month high after three consecutive days of gains. :)

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If we stay 'in' would you just whack it all back in within days?

 

As it is an ISA, my only restriction on how much I re-invest is the annual ISA limit of £50k, which I am nowhere near so it depends on how quickly things take off. However the last three times the FTSE has grown from about 6200 to its all-time high of 7000 (as suggsted might happen after an "in" vote) it has taken between 1 and 2 years to get there, and then every time it has tumbled immediately after reaching 7000, so I would probably pull out again then, anyway.

 

My feeling at the moment is to stay out until after the US elections and see what happens then.

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