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Portfolio Positioning For Brexit Vote

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#101

Well done!

I have no exposure to Sterling at all. I’m content to watch. It strikes me that there will be more uncertainty. I suspect there will be another referendum, but, will it all be too little too late?


#102

This 2nd referendum jobby is also not so clear cut.

Let’s pretend it does happen, that it’s a given. What is going to be on the ballot?

  • Remain (that’s obvious or so I think).
  • Mays by now possibly revised deal.
  • No Deal (remainers won’t agree ).

I know C is going to be unpopular with those calling for a second chance at us getting the correct answer, but to protect democracy, you can’t offer brexiteers brino. The brexiteers do not want Mays deal nor do they want remain.
A & B are a choice of being punched in the face or kicked in the balls.


#103

May needs to return the deal without the Irish backstop and she’ll get it through.


#104

Hi SC,

I agree, but little was ever clear-cut about this entire issue since day 1. In my humble view, a binary choice between the known final Brexit offer, be it Chequers or “no deal”, & revoking Article 50 seems less complicated than a 3-way question. So more preferable. If we have 3 options, we probably run the risk of finding ourselves in yet another Brexit pickle. :slight_smile:

I don’t agree with Tony Blair about much since his woeful decision to support US foreign policy in a military campaign to overthrow a secular government in Iraq, be it a dictatorship. One that the US supported previously when it suited them, as they do other dictators now. But I do strongly agree with Blair that a 2nd vote on whether to accept or reject altogether the final deal, in latter case revoking Article 50, would be fairly definitive. Many people have changed their minds since 2 & 1/2 years ago, according to the latest data & likely economic impact of any Brexit. - Regards.

PS: Mindful that some here want to steer clear of Brexit on this thread, I shall respect that by adding little more here.


#105

That’s what I’d expect… yes.
And yes… fully expecting a revision to suddenly appear out of the hat regarding the backstop in time for voting on the amendment… whether it will sway enough MPs is another matter.


#106

Agreed, my fault and I know Pref doesn’t want it to go that way. It just formulates the battle plan though. I too will try not to add more if not trading plan related.


#107

Not that we would ever have another ref , but Splitting the Leave vote would see the U.K. descend into all out anarchy against the elite establishment and bring the city to its knees.


#108

It’s a shame that @broadmoor1 won’t have a trading plan in place for the immediate “No Brexit” dividend later next year after #BrexitRef2.
The UK market might drop briefly when the inevitable downvote takes place but that will be nothing compared to i) the market increase after #BrexitRef2 is called and then b) the market increase after the “No Brexit” event.

Far from “anarchy against the elite establishment and bring the city to its knees”… there will be people all over the land (apart from East Anglia… tough) cheering from the rooftops… and a lot of happy investors (those who saw it coming anyway).


#109

I’m a bit late to this, but if I thought tbe FTSE100 was nailed on to tank after the vote, then, rather than selling out and hoping to buy back later, I’d be buying an inverse tracker ETF to hedge my portfolio - something like SUK2, which, if the FTSE100 dropped by 5%, would rise by ~10%.

Obviously if the FTSE100 rose then you’d be down on it twice as much as the rise, but the pain would likely be lessened by the gains in your individual stocks

BB


#110

You reckon?

What happens if you get a second Referendum under a Labour Government propped up by the SNP?

You may not like his stance on Brexit, but, he knows how to consistently make money.


#111

Different events. Labour Government being voted in will give short term UK market and GBP fall… as well as dramatic falls on a few certain specific stocks… then gradual recovery as markets realise nothing much has changed and new Government carries on pretty much as before.
#BrexitRef2 announcement will see a spur in UK markets followed by a volatile period with ebb and flow according to swings in reporting between Leave and Remain options.

Who we talking about? Broadmoor? Given some of the things he’s posted I wouldn’t trust much that he says.


#112

Hi All,

Although I understand the logic of trying to protect one’s position against a potential problem, how many of us really know what will happen and when, and indeed the severity of any “blip”?

Just imagine what would happen to the markets if everyone, including large institutional investors, followed this course of action!!!

None of us like to make a loss, but no-one should invest (or even re-invest) in the stock market if they are unwilling to experience fluctuations in share prices.

Also, we can never be sure of the “opportunity cost” of exiting a particular equity.

We don’t know what is going on behind the scenes in the “mergers and acquisitions” arena, resulting in an unexpected announcement and spike in certain shares, which may require Rights Issues to raise the necessary funds to finance the takeover.

Unless any exit and re-entry is well-timed, there may well be a loss of valuable dividend income, including “Special Dividends”.

There are so many factors in play which influence global markets, that is is often very difficult to isolate one specific cause for either a bounce or the following dip.

With all major markets up today, what will happen tomorrow, or indeed the rest of the week/month?

Take care, and make wise decisions.

Regards,

Steve


#113

Hi @Boring_Bernie,

Well soi has started a whole topic on hedging on the LLOY board and I made a post on there regarding leveraged ETFs as per your suggestion. See my post below:

Hedging an investment etc. OT

To give you the edited highlights there are several problems with this approach:-
a) You really need to be a sophisticated investor with trading skills to use them effectively - maybe that is you though ?.
b) Leveraged ETFs don’t work exactly as you might expect and really aren’t suitable for holding for more than a few days at most - but maybe that would be long enough in this case.
c) To fully hedge a large portfolio you would have to put a lot of money into the leveraged ETF. Eg £25,000 to hedge a £75,000 portfolio if you use a 3x leveraged short ETF. £25,000 to hedge a £50,000 portfolio with something like SUK2. If you are content to commit those sort of sums to a leveraged ETF then good luck to you, but it is not for me !. Seriously though I would not suggest that anybody should do it.

In this particular instance I have another reason for wanting to sell and buyback, which is that I want to change the composition of my portfolio by eliminating nearly all single stocks and replacing them with ETFs and Investment Trusts. I realise that I am taking a chance in doing it, but the probability of a drop in the FTSE and the £ looks pretty high to me. Personally I don’t believe that at 7000+ we have fully priced in the chaos that will ensue if the vote isn’t passed. But this is just my personal opinion DYOR etc.

ATB

Pref


#114

Hi

Well history shows that after a 1 day spike rise based mostly on hopium, markets drop the follwong day.

Today will be no exception.

ATB

soi


#115

Hi S_C

Sorry to hear of you taking a loss. It happens.

However a couple of positives ( might not seem it to you now )
You gave careful consideration to a shareholding you were not comfortable with.
Decided that selling would be best for you and took action.

Respect for that.

Good exit prices also, relative to the day s range
Not that you will want to be but I would be surprised if you could not replace your sells at lower.
Waiting seems a decent option.

ATB & GL

soi


#116

Hi @Swamp_Cat,

Well you are now in the safety of cash, that has to be seen as a good thing, but it can feel scary I know. From there you can invest in anything else that you want to, I am pretty sure you will even be able to buy back into LLOY at a lower price if you want to do that. No guarantees obviously but personally I think there is a very good chance of that. Or you can invest elsewhere, LLOY isnt the only fish in the sea.

I had a hectic morning yesterday, busily setting stop losses and moving them up as prices advanced. By the end of the day all my stop losses had been filled and I have now sold ALL of my targeted investments. My only FTSE 100 exposure now is RDSB, BP, HSBA & GSK I think thats it - everything else is GONE. Got a decent amount in cash now ready to deploy.

Wished I’d stop lossed and sold GSK yesterday the day it had. Single stocks, I just need to get out of them. Almost there now though I have no immediate plans to sell those 4.

ATB

Pref


#117

Well @SteveShares,

As usual we are at different ends of the investment universe !!. I wish you all the best with your investment(s) in the coming days, HSBA I think will do OK. Thats my assumption anyway, have kept my holding. No guarantees obviously !.

ATB

Pref


#118

Hi Again @Swamp_Cat,

I dont know how many LLOY you had but you must be pleased to see that they are trading at 55.57 ATM a fair bit lower than your selling price. Market is down generally but I suspect we might be seeing the market start/continue to price in the likely vote result as brexit sensitive stocks like lloyds, housebuilders, ITV and M&S are down a fair bit ?. Could just be a down day though obviously.

Anyway the investments I sold yesterday are worth ~£1,200 less than what I sold them for, so I’m not unhappy ATM. Could quickly & easily go the other way though I quite realise !.

ATB

Pref


#119

It’s funny, there is more than a whiff of FOMO. It’s almost like people want to have their cake and eat it. Why do people have such an aversion to holding cash? It’s infinitely liquid, offers a speculative opportunity and is relatively safe. Patience, plenty of opportunities present themselves.


#120

Well Pref, it’s a little early to say I’m happy. Although cash is at least a less worrying situation. The thing is, I could be crying in my tea a week today.

US is having a poor day Dow & s&p both over 2% down.