interactive investor has conducted a poll of investors on whether this week's Brexit uncertainty is informing their investment strategy. Jemma Jackson shares the results.
Conducted between 6 and 11 December*, there is an even split between those who have a strategy and are sticking with it (39%) and those who are doing nothing until a decision is made on Brexit (38%), whilst 13% are heading for less risky investments. There is also a hard core who like volatility and are trading more (10%).
Moira O'Neill, Head of Personal Finance, interactive investor, says:
"As the UK finds itself in extraordinary, unprecedented times, it is encouraging to see so many investors keeping a cool head and sticking to their strategy. Equally, doing nothing is far better than panicking, so it is good to see that four in 10 are taking more of a 'wait and see' approach, choosing to do nothing until there is more clarity on Brexit.
"Some 13% of investors are heading for less risky investments, and this might be the right decision for some, although history tells us that emotions can often get in the way of a sound investing strategy.
"Before selling your crown jewels and reducing your risk, it's worth reviewing your portfolio in the context of any cash balances you may have – it may be that you are better positioned for a market storm than you think. It's also worth looking at the cash positions in your funds. We have seen several funds increasing their cash positions over the course of 2018, so this is worth bearing in mind.
"Meanwhile, there will always be the hard-core investors who actively embrace market volatility – although trying to catch a falling knife can be a high-risk strategy."
Richard Hunter, Head of Markets, interactive investor adds:
"The ironic resilience of the UK's major indices given the latest stage of the Westminster drama, is largely driven by the ongoing weakness of sterling. That being said, the FTSE 100 remains down 11% in the year to date, as institutional and international investors have fled domestic stocks for reasons starkly highlighted by today’s events.
"The current fragility of investor sentiment, due in part to a potential slowdown in global growth as well as escalating trade tensions between the world’s two largest economies, will ask further serious questions of an already beleaguered market in the UK."
*interactive investor received 488 responses between 6 and 11 December.
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