Me too. Sold a couple of purchases today on @soi “guarantee” of 55p, but the Telegraph Questor column sale also influenced me - they do not see long term sustainable growth in the dividend. I shall be interested in what they recommend next Friday. @soi I still do not see any rational for 55, why not 54, or 53 or the 50 it hit last December and again recently. Why 55?
LLOY appears set to hit all of those, but 55 comes first, right? But you can make a case for all those prices you name on the monthly analysis… and that is just the S1 level
Sorry . I used 55 as an initial support level.
All your numbers also quite possible in step downs.
Well my ISA is staying put @PrefInvestor1, up north I feel the majority will vote tory. I feel no enthusiasm to Corbyn from my casual life experiences. And peeps seem to think Boris will put brexit behind us. The thought brexit will drag on no matter what is not prevalent.
I think the better play is to retain 100% of your holdings and on the Boris Boost, sell the new highs before realism hits in and sp’s dip back, possibly all the way back but not necessarily.
Hi @swamp_rat, Well I am more worried about a “corbyn crash” than a “boris bounce”. My portfolio will happily cope with the latter but I am going to do a detailed review this weekend to see what changes I might need to make again based on the economic effects of a Labour government.
I am not surprised to hear that you are planning to keep your ISA - I am currently thinking about topping up ours to the full £40,000 level on the morning of Dec 13th, if Labour were to get in. As for what its invested in thats another matter, plan would be to reduce my FTSE exposure (which is already pretty limited) ahead of the date just to make sure I dont get hit by the FTSE/GBP drop I think. But still thinking about it ATM.
As far as I am concerned no loss on the day or a gain would be nice - a loss the thing to be planned for and avoided.
I fully understand your point Pref, I lost a chunk on 2016 brexit date. But I’m taking the chance again on December 12th. We all have different appetites towards risk I suppose.
And how will that help? Unless you bought a foreign currency with the proceeds?
If your scenario is correct (and I don’t think it would be) then your GBP cash would be worth less too.
In the unlikely event of a Labour win sterling may rise with the prospect of a hard Brexit being off the table. Some stocks may fall including those that Labour is considering for renationalisation.
My guess is that the markets would prefer a pro-Remain hung parliament with no prospect of a post-Brexit recession.
Frog in a tree
I’ve been getting a different feeling in the north, with many people planning to vote for the Brexit party and some who were Labour voters all their lives, that were previously supporting Johnson, believe his deal is a “sell out”.
Hardly a scientific poll and its early days in the campaign yet, but Johnson’s deal isn’t going to look any better the more it is analysed.
I haven’t personally spoken to one person, face-to-face or on social media, who haven’t spoken about voting for Leave or Remain when talking about their intentions in the general election. I only know a handful who have changed their minds since the referendum too. They are mostly people who voted to Leave as a protest, never expecting Leave would win …
… but there are a couple who think Brexit is now damaging their business so badly that it must be brought to an end. Yes, these are business owners saying that. You can be sure I have pointed out that Brexit only STARTS once a deal, authored by Tories or Labour, is passed. They seem to think that would be the start of things getting better though, possibly it would be for their businesses, but I think they really just don’t want to face up to the thought of several years more of Brexit beyond and Leave deal being agreed.
Don’t forget to consider the possibility of there being no overall majority for Brexit AFTER the election, no matter who wins it.
I think you may come to the same conclusion as me that cash is safer in the short term, followed by heavy foreign earners, although they will be hit initially, I’m assuming, post general election in the event of a Corbyn win.
Should the outcome be that then my concern is should I spend my cash pool at that point on FTSE 100 heavy foreign earners (RDSB, HSBC, GLEN, RIO and the like) … when there is still the danger of a global slowdown and possible crash.
The positive noises coming from trade talks between USA/China have me currently leaning towards doing that, as I believe those companies will come back very quickly after a ‘Corbyn Crash’.
BUT, if Corbyn starts spending as promised, there are also going to be plenty of devalued UK-centric companies that will be pulled down in that crash that will benefit from a large spending splurge by a government of any stripe. How to play that I wonder?
Housing could be one good way to go. The additional housing promised isn’t going to get built without the government engaging with the existing housebuilders.
One general thing to check, and I have no idea how to do this easily without a ton of leg work, is actually rank every company’s exposure to the UK. LLOY, RBS, BDEV have loads, if not 100%, RDSB, BP have quite a lot, GLEN, RIO has none, for example.
Please share with us any conclusions you come to.
I too will max out my allowance before the election. Not a 100% guarantee that ISAs are safe, but I’m fairly certain that at some point in a Corbyn government the allowance will be cut. If we’re lucky, ISAs will remain in the current form otherwise, if not, its possible they could disappear altogether.
You may be right, unless it is obviously going to lead to yet another election in short order.
VERY, VERY difficult to predict how international traders, especially fx traders, are going to view various outcomes.
A Corbyn government may well be seen as bad initially, but not for foreign earners I think… but even a disastrous Corbyn government can only last a max. of 5 years. Brexit will continue to destroy wealth for many more years than that.
ISAs are a tax avoidance strategy favouring the haves over the have nots. When we talk about comparative taxation people usually forget that ISAs are part of the equation. I see this in my own finances where dividend income amounts to a bit over 25%, and growing, of my total income. Additionally, any capital growth within an ISA is exempt from capital gains tax which is another form of tax avoidance.
In order to help to restore our hollowed out public services I would support ISA allowances being slashed to £10K per annum and income tax and capital gains tax being payable after a ceiling of £1 million of assets protected in an ISA.
Frog in a tree
I think that seems extremely high to the average person on the Clapham omnibus. So if retained at all, it wouldn’t surprise me to see it cut more by a Corbyn government.
Consider the average UK salary is about £26k before tax, probably lose £5k of that in taxation (in.c N.I.) and spend maybe 25% or more of the remainder on rent/mortgage. That leaves about £15k to live on for all other expenses. Very few people would have £10k to spare out of that, which highlights how it benefits the already better off.
In the event of a Corbyn government I can see that argument being made and an allowance so small being discussed as reasonable that the question will soon arise, ‘Are ISAs worth keeping at all?’.
Just to confirm… the Labour Party has made no such indications they are going to touch ISAs or pensions. It will not be part of their manifesto.
With any form of Brexit, the UK will be worse off and you can expect a need to increase the tax intake especially seeing as there will be large losses in Corp tax directly due to Brexit.
You can therefore expect ANY future Government to be looking at ways to do just that… and outside of an Election campaign but as part of a Budget.
That is where I would expect to see any changes to ISAs throughout the term of a labour government. I don’t rule it out in the first budget directly after the election, whether in the manifesto or not - exactly because they’re going to be looking to raise the tax take as you point out.
Hi @J_Westlock, Well yes I think my immediate plan is to switch a few things into overseas ITs and ETFs in advance of the election date. I take your point about my GBP cash being devalued (albeit that it seems to me that this would feed through slowly via inflation) but unless I did a large scale transfer into another currency (or investments in same) there s nothing I can do about that is there ?. And I see doing that as a high risk bet with costs involved.
I dont mind you telling me that I’m wrong with my possible scenario, but given that you clearly have a different view it would be good to know what your view actually is ?. I am always prepared to listen and take on board any inputs that I think are well considered.
That’s why I post here after all…
What an ISA millionaires club !!!. Dont see Labour going for that…
Hi @Eadwig/All, So I have conducted a review of my portfolio which includes investments in the following groupings:-
- UK Equities – Only 5 holdings. Will keep my 3 foreign earners but may sell the 2 UK centric stocks.
- Overseas ITs – No action required. May add to some of them.
- Commodity ITs – All overseas holdings and USD earners, so no action required.
- Debt Investments – Don’t anticipate much reaction on the 13th Dec. No immediate action required.
- Preference Shares– Don’t anticipate much reaction on the 13th Dec. No immediate action required. Long term if interest rates are going to go up I will need to reduce my holdings in these (again). Done really well in the last year though, the worst performer has managed ~15% total return. All still yielding ~6%.
- ETFs – Sell my 2 UK index trackers and buy overseas ETFs to replace them. This will reduce my FTSE 100 exposure to very little indeed.
- Renewables – No immediate action required. Might even benefit from Labour climate policy ?.
In total there are 7 investments affected and about 20% by value of my portfolio. Need to research and find and purchase suitable replacements in advance of the 13th December, or just move to cash maybe ?. Have a list of candidates just need to work through them now. Need to have a conservative win in mind as well in these selections, moving to cash not such a good idea in that case ?. Also need to select alternatives that dont damage the income stream too much.
Not easy is it? You have more to balance than me as well, although I also have some different concerns as you know.
One thing I haven’t mentioned much, in the event of a Brexit, even a No Deal Brexit, there will be some winners. Perhaps especially in smaller companies that tend to be more flexible and nimble. I can’t say I have many ideas, but I’m sure some will do well, but no one seems to either want to discuss it or have any specific ideas.
Same goes for any drastic changes to government policy, there will be winners and losers, especially with all the spending promises being made - If tens of billions is being pumped into the economy we’d be pretty poor active investors if we couldn’t catch some winners, the public sector isn’t going to soak it all up even with a Corbyn government. Even if they did, retailers etc will see a huge boost in sales at least, as an example.
Helluva a lot to consider there as well … after we’ve finished bulletproofing our portfolios as much as we can. I hope a few more people are prepared to join in with the discussion.
Anyway, have to leave in a few hours for the airport - just hoping the roads are all open and not flooded out. Looks OK at the moment. I’ll be in sunny Poland next time I post (at least it was sunny and warm when I left, I doubt it is now even just 3 weeks later). Have a good weekend.