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Portfolio Positioning For Brexit Vote

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#181

Quite possibly, however, this bull market is getting on for the longest in history. It needs something to drive it. If it’s not cheap money, Tech stocks, earnings or 250k+ jobs a month, or rising house prices, what is it?

The market corrected 10% at the beginning of the year and now we are not far off that level. I see 2300 S&P sometime soon.


#182

Hey S_C,

As you know I am purely a pa trader. I really don’t pay much attention to news (obviously Non Farms or FOMC rate decision I will not trade). I believe the market moves in fairly predicable rotations or even harmonics. We had a market high on 24/9 at 2950, then dropped 350 points to 2600. Since then we have moved 2600 to 2817 (217 pts), then 2817 to 2628 (189pts), then 2813 to 2620 (193pts). So really the market is moving in 200 point moves.

Furthermore, if you overlay a Fibonacci chart, then you will find a classic 60% retrace from the initial 350 point correction (fall 350 points, recover 200points). In fact an exact 60 rt would have been 210points

It take quite a leap of thought to look at things this way, but, if you stop trying to apply news events to the market and look at the geometary of the markets you will find rotation sizes are quite predictable


#183

Hi All,

Well took some time this morning to review the performance of my portfolio and my buys/sells last week.

Overall I would assess it as a success to date, the new portfolio is down 1.27% over the week whereas the old one is down twice as much at 2.51%.

Regarding my buys some have been OK and some not so good:-

Overall though I would comment that I suspect that, with hindsight, most of the market moves this week have likely been cause by reactions to US markets, trade war and oil price fears and may have been only marginally affected by brexit. This may account for the fact that many areas of my portfolio which I didnt see being much affected in practice have been.

Overall now I have spent over half of the cash realised by my sales. I am actively considering selling a couple of things on monday before the vote on Tuesday - maybe crazy but I am.

ATB

Pref


#184

Pref, I’m not as qualified as the profitable traders here but my guess is Monday is to late to get much out of May day.
US had another poor close, you might see a poor open monday.


#185

Hi @Swamp_Cat,

Yes US close on Friday wasnt good was it, just have to see what happens here on Monday. As to whether its worth selling a few things to buy back after the vote it comes down to the same old question of how much impact the vote is going to have. Personally its my guess it still might be worth 2-3% off the FTSE if the deal gets voted down ?. But no way to know for sure.

I shall take a view on what to do come monday…

ATB

Pref


#186

Pref, i think Wednesday will see a vote of no confidence so that may be “peak carnage” mk1 in my mind?

I reckon May would win that, then peak carnage mk2 may or may not arrive on the outcome of a tweaked deal vote.


#187

Hi @Swamp_Cat,

Well I don’t know that I can accurately call any of the political events. Personally I just feel that if the vote does fail then there will be a negative market reaction, even with all of the damage that we’ve already seen. I don’t think everything has already been priced in myself, even as low we are now I reckon we can still go lower.

Sounds like you have a plan in mind anyway. Good luck with it.

ATB

Pref


#188

Hi Pref, yes I have now got my plan but it still depends on the next next 4 mornings news. US still concerns me.

I’ll be waiting until peak carnage mk1 listed above to go all in.
Next move is in the pipelines, depends on what may comes back from EU with on Thursday. Might sell the lot or I might hold my nerve.


#189

Hi @Swamp_Cat,

Guessing you are looking ahead to a General Election scenario if you are thinking of selling out completely ?. I confess I have contemplated that alternative also, especially when I was holding a lot of utilities and housebuilders, both areas that are firmly in the crosshairs of the labour party IMHO.

But having now more or less completed my portfolio re-structuring, my new portfolio looks like this (or it will do after my last 5 buys):-

image

And the only things I think I would possibly need to sell in that event of a General Election are those in red. None of the overseas stuff should be much affected by the UK government. Prefs, debt & renewables I dont see being much affected either. Could be wrong as always !.

As you can see I have quite a bit of foreign currency exposure in the portfolio now. Hoping that will be positive if the £ drops, but will work the other way if the £ gains !.

Thinking about selling my ETFs (UK) investments on Monday with the aim of buying back lower, but still pondering. Will wait and see if TM delays the vote and what the markets do on monday morning.

ATB

Pref

PS Maybe even the commodities are really USD earning…


#190

I got to admit it pref, US might stop me buying at all. Futures down again for new week. Lots of uncertainty about with US, Brexit, France, Deutche Bank & Italy.

VIX is up 9.63% in a day. Not sure how often that happens as I only just started looking at VIX.

No deal Brexit still on cards and no matter how unlikely, it’s getting more likely.

Hope I’m not talking myself our of a great buying oppo.


#191

Not sure how relevant Japan is but more negativity.


#192

Morning S_C.

Japan 3rd largest economy in the world.
According to IG, the nikkei is the 7th most popular index to trade.

What influence the nikkei has on other indices, I do not know.

The Japan market puzzles me somewhat.

Nikkei now down about 500 pts.

GL for the week.

soi


#193

Hi @Swamp_Cat,

Well believe me I completely understand your concerns in the current situation, very worrying isn’t it. And I also firmly of the view that capital preservation is important, hence the actions that I have been taking.

But against all that personally I don’t see a global recession coming, let’s face it the US economy is very strong, but I guess that the UK might suffer if there is a no deal brexit. But I don’t think that markets are going to crash and drop by 50% or something myself, but yes they are clearly going to be volatile. Could be wrong obviously.

And there is also the income side of things to be considered. Sticking your cash in a savings account will get you only 1.5% if that. Right now my portfolio is yielding ~6.5%, so in a couple of years that will boost my capital by 13% (hopefully more with dividends reinvested). I am hoping that this level of income plus some recovery in the markets over time will be enough to tide me over all of this. There are no guarantees though !.

So I shall continue trying to preserve my capital and increase my income by lowering my average on my investments in the way that I have been doing. Buy and hold investors who have been just sitting on their hands, especially those invested in the likes of LLOY, HSBA, AV., LGEN and SLA (to name but a few) must have seen significant portfolio losses in the last week. I am not happy with my losses either but am committed to my course of action.

Good luck with whatever you decide to do.

Pref


#194

Hi Pref

In terms of my shares I have done all the selling reducing I am going to.

Quite happy to take a chance on remaining holdings.
Agree with you, do not think there will be a crash, volatility yes.

I also reduced/closed some of my SB ( spreadbet ) positions, pulling risk off.

As they are leveraged the risk is great.

Indices seem to have recovered a bit.

ATB

soi


#195

In terms of forward looking earnings, which the market is fixated on, I don’t think the US is looking that healthy.


#196

Hi All,

Well a remarkably good open really under the circumstances !.

08:40 now and the FTSE is only down by 10 points and US Futures have recovered to be only 0.2x% down.

Looks more like a brexit moving day to me today with housebuilders, utlities, ITV & LLOY down the most.

AV. & LGEN down a tad but not enough to encourage me to buy. Still havent decided whether to sell my UK ETFs yet, but as the vote isnt happening till tomorrow evening (I believe) there is still time to do that even tomorrow and am inclined to hang-on in case the price improves.

ATB

Pref


#197

Hi All,

Well it sounds like the vote is going to be delayed, statement due in parliament this afternoon. Not sure how long it will be delayed for and what she plans to do with the extra time. Anyway as if 12:45 the FTSE is now slightly positive and US Futures close to being the same way. £ has dropped a lot as a consequence, down ~1% against the AUD and 0.9% against the EUR. This has pushed my european and Asia/Australian ETFs up a bit anyway.

LLOY now down at 53.4ish, that’s 10% down from where I sold. If I wanted any I might be tempted, but I don’t so I won’t. Things like SLA going cheap as well at 233, that’s down almost 15% from where I sold at 271 just a week ago. But it’s another stock I’m not interested in. I would be interested in Aviva and lgen if they dropped further, but that doesn’t seem to be happening ATM.

Still have 5 buys to make…

ATB

Pref


#198

Hi Pref, I might have just made a mistake but I topped up in Lloyds at 53.5 ish, I’ll calculate late with fees.

Still got majority cash on the sidelines for another trade if things go further south, it’s a punt at the moment, may has been on the blower to junker, they both fear no deal gaining pace so had to pull a shifty one here.

They both know they gotta deal with the back stop or the could be in deeper water later.

If I was confident I’d of gone in heavier but I’m not.


#199

Hi All,

Well having watched events in Parliament today I have to say that I suspect that TMs deal may now never be put to a vote, but who knows. However the potential for political turmoil is high with votes of no confidence, general elections, alternative deals, leadership challenges and a second referendum all possibilities. Where will this lead the market - I have no idea really.

The £ got really thumped as a result of todays events down 1.6% against the USD, 1% against the EUR and 1.28% against the AUD. But I see that IG has the markets up quite a bit tomorrow and US markets arent doing a lot, which is good at this critical time.

My new portfolio performed well today and was ONLY down just over £1,000. The previous one (before all my selling) was down £3,700 and is now down almost 5 digits compared with my new portfolio. Not hard to see why when you look at the following table of the stocks that I sold:-

This would seem to indicate that might be major opportunities in these stocks for anyone brave enough to buy them right now. But that’s definitely not me, I’m sticking to my plan. DYOR etc. !!

For anyone who has just held throughout, well good luck. You must have taken significant losses. Maybe it will bounce back quickly like it did after the 2016 referendum, I really hope so.

Still got my last 5 buys to do…

ATB

Pref


#200

Hi All,

Well from the market reaction today (or lack of it) seems nobody cares much about the no confidence vote in TM tonight ?. I guess if we get Boris instead that view might change !.

Anyway I bought the other half of my AV. & LGEN yesterday but didnt get the very best prices available on the day, though I did do a bit better than my first buy in both cases. 6.8% yield on LGEN and 7.2% on AV cant be bad !. Was out in the morning but set some limit orders that didn’t get filled, prices started to ramp up in the early afternoon so I bought fearing that I might lose my chance. Should have waited but there you go, only a couple of pence anyway.

Just leaves NESF (limit order set) and SEDY & IUKD (planing to buy tomorrow when they both go XD) with luck it will be a down day…if not I might wait for the next down day. That will see me fully invested again.

ATB

Pref