A flash poll by interactive investor, the UK's largest flat-fee investment platform, shows the prospect of a no-deal Brexit has knocked investor sentiment as the October 31 deadline for leaving the EU edges closer.
Some 41% of investors polled in August said they have an investment strategy in place and are sticking to it, despite the ongoing Brexit uncertainty. This is down from 53% in March, suggesting that investors are feeling less certain about the best course of action.
In addition, there has been a notable fall in investors deciding to filter out market 'noise' and take a long-term view – 23% in August compared to 32% in March.
This is not to say that appetite for investing has waned, as the vast majority of standard savings accounts still fail to pay interest above the rate of inflation – meaning the value of savings are eroded by the rising cost of living in real terms.
Indeed as uncertainty over the Brexit gridlock continues to mount over three years on from the EU referendum vote, more investors are growing tired of putting their investment decisions on hold. In August, 18% of respondents said they would not invest until a firm decision has been made on Brexit - but this was down seven percentage points from 25% in March's poll and significantly lower than 31% in January's instalment and 38% in December 2018.
Meanwhile, almost one in four (24%) respondents said they’re holding less UK exposed stocks over fear of what would happen to the pound if Britain leaves the 28-nation bloc without a deal.
In all, concerns over Brexit has crept up slightly from 36% in March to 37.5% in August, overtaking the US-China trade war as number one investor worry (32.4%).
Myron Jobson, Personal Finance Campaigner, interactive investor says: "The UK investment market has been buffeted by the ongoing Brexit uncertainty and the prospect of a no-deal Brexit appears to have further soured investors' appetite to the region. Fewer investors are sticking with their strategy and are increasing their weighting to companies with less exposure to the UK over fears of how Brexit will affect the value of sterling.
"We have seen an uptick in the number of investors investing in gold, as fears over how stock markets will be affected by Brexit if and when the 31 October deadline is met takes hold. The problem is that amid volatile stock markets, it's difficult for investors to know how and when to invest. This is understandable, but also provides opportunities for contrarian investors willing to ride out volatility in the short term. Investors need to have clear goals and a diversified portfolio and it’s important to take a long term view."
Rebecca O’Keeffe, Head of Investment, interactive investor, says:
"Investing in non-UK assets has been a very rewarding strategy since the EU referendum, with investors benefiting from the weakness in sterling - and higher returns in global markets. Should the UK crash out of the EU without a deal, sterling may fall even further from its current low level, so it is no surprise that almost a quarter of investors polled said they are holding less in UK assets."
During August, interactive investor has been running a commission free trading offer on the Super 60 list of investments to new and existing customers. The offer applies to orders placed online and on our mobile apps that are executed before 30th August 2019.
For more information, please visit our Super 60 page.
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