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Portfolio Positioning For Brexit Vote

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#121

Hi Again @Swamp_Cat,

Yes I see the US is down big again today. Doesnt affect me though as I never like investing in the US, they really only have growth stocks and very few pay decent dividends. And my broker charges a 1% currency fee when buying/selling anything in a foreign currency which also put me off investing there, though I have held things like SMT, PCT & JUSC in the past - right now I have zero US exposure.

Just sitting back with my cash and watching events unfold. Just need to decide when to buy in, I think that doing it in increments might make sense. Jumping back in all at once it might go lower ?..but then again it might recover !. Difficult. Just mustnt leave it too long… Peak carnage might be the optimum time to buy ?.

ATB

Pref


#122

Yeah, I considered dribs n drabs buying.

Peak carnage is key but I cannot decide if that would be directly after voting down Mays deal or not. The problem in choosing is nobody has said what happens after that event (if it happens).


#123

I have also considered a 100% rebuy on the carnage.


#124

The US do have decent dividend stocks. Leaving aside REITS, MLPs and BDCs individual stocks like XOM and GIS pay well over 4%. I really like Brookfield Infrastructure Fund which yields 4.7%

I have a fair amount experience with most of these on leverage. Some of the MLPs pay 12-13% on a monthly distribution.

Also don’t forget you are not exposed to Sterling, which is worth something.

Seriously, some of these companies like Becton Dickinson have increase their dividends for 50 years.


#125

Hi Again @Swamp_Cat, I should also have said that I don’t plan to buy back in till at least Tuesday of next week (the day of the vote) but I guess one needs to keep a close eye on political developments in the meantime just in case it affects the chance of the vote going through.

I guess achieving some target level of profit from the exercise might also be a way to decide ?. For instance if you just plan to buy back into LLOY you could just decide how much you are prepared to pay for them and just set a buy limit order…?. Just a thought. Might go lower of course, but mustn’t be greedy !. Set it too low and it might never get there.

Anyway as I said one needs to keep a close eye on things as the wind may change and what is currently a winning strategy could quickly become a losing one !.

Take care out there. In the end you must do whatever you feel comfortable with…

ATB

Pref


#126

Hi @macbonzo,

Well as my home currency I don’t see how I can avoid being exposed to sterling ?.

If I wanted to invest in US stocks I think I would have to move brokers or open a new account with another broker anyway. My brokers FX charges (1% on buy and another 1% on sell) completely put me off investing in anything denominated in USD or indeed anything that’s not GBP.

I also find US markets far too volatile for my liking. Stocks take enormous daily swings, maybe USD ETFs might be OK but single stocks - absolutely not.

I have tried investing in Apple, Google, Facebook and Microsoft in the past. It has never been successful, either the stocks make a major move down or the GBP/USD exchange rate moves against you. After several unsuccessful forays I don’t even seriously consider doing it any more. I have tried buying some investment trusts that are invested in US stocks, but no dividends on offer via this route.

All in all I just don’t like it so I don’t do it…

ATB

Pref


#127

No point considering anything before Tuesday but let’s not overlook French riots, US down big time today (I hear recession talk in dark corners), Russia, US/China issues, Deutsche Bank, Italy budget.

So yes, I’m considering buying on a dip but I’m really concerned the dip is deeper than a flash.


#128

Hi S_C

Yes I follow your thinking.

It is unfortunate that political events can lead to very large swings.

A world leader or important Central banker talking and markets go wild.

Nothing wrong with sitting on cash for a while.

There will always be volatility though.
There will will always be opportunity.

One thing I have noticed is that after a big market swing in 1 direction, there is usually a move the other way, maybe to a lesser degree.

Oversold markets often get bought back and vice versa.

Whether investing or trading it is not easy.

ATB

soi


#129

Hi All,

Well FTSE down ~1.2% as I write this but not really clear whether its brexit or US/trade issues or both thats causing it. Perhaps just generally uncertainty, definitely a lot of that around.

Actually housebuilders, ITV and LLOY (all stocks that generally take no deal brexit quite badly) are up quite a bit today. Some housebuilders up 4-6% ATM. Perhaps people are figuring that a hard brexit is now unlikely after yesterdays developments in Parliament ?.

ATB

Pref


#130

Hi Again @Swamp_Cat,

Looking at how FTSE 100 stocks are performing today and factoring in yesterdays developments in Parliament I am now thinking of buying back in before the vote next Tuesday.

It all comes down to one’s reading of the political situation, where I certainly cant claim any significant expertise. But I can now see the possibility that the vote will no longer be viewed as all thats keeping us from a no deal brexit, with all that this would mean. Instead it might purely become a choice between TMs brexit and the other more moderate outcomes, including a second referendum, with no deal actually completely off the table.

If that DOES become the situation I suspect that the vote will no longer have a dramatic impact on the FTSE and the £ that might otherwise have been the case.

You might care to consider this possibility yourself, completely up to you obviously. As usual I could be totally wrong !.

Take care. The situation could change very quickly.

ATB

Pref


#131

Precisely @PrefInvestor1. I was saying in my earlier posts that when the inevitable downvote/s of the May Deal take place … it isn’t necessarily a bad thing for the economy… it opens up the very real prospect of #BrexitRef2 and a “No Brexit” vote.

I agree that they will sink… but I don’t think by much or for long. It certainly isn’t an event I personally will be rearranging my investments over… which are already pretty diversified across sectors and countries.


#132

Hi @J_Westlock, Well Ive probably made ~£2,000 out of all this so far (comparing my new & old portfolio valuations). Still hoping for some more. And its allowing me to put more into ETFs and get rid of many of my single stock holdings. These are things that I need to do anyway. Getting paid to do them at this time.

ATB

Pref


#133

Hi JW,

I generally agree. Also things have changed considerably after yesterday’s 3 defeats for May. A “no deal” disorderly Brexit always seemed unlikely. Now it can be ruled out. Fears of a worst-case scenario have receded. At least a modicum of sanity prevails.

But I’ve always thought, & now even more so, that the key Parliamentary vote on the 11th really could go either way via enough abstentions. Now even many Brexiteers may be more worried that if Chequers gets voted down it’ll lead to Article 50 being extended, a 2nd Vote &, as you say, no Brexit at all. That ups the ante considerably for them & risks not seeing any Brexit at all.

However, if May’s deal is voted down, I too won’t be disappointed. This entire process has been an embarrassing, disruptive fiasco from day 1 that benefits no-one, bar wealthy tax-dodgers. Article 50 now needs revoking. The sooner the better.

By the by, like you, I’ve never been remotely tempted to cut positions or adapt my market strategy by trying to anticipate a number of variables in & around this chaotic process, including a possible early GE. It’s very difficult to outguess markets even when political situations are less unstable & macro-factors far less complex.

Brexit’s uncertainties have seen many solid stocks grossly oversold. When markets finally have greater clarity, I anticipate a considerable bounce. Only the timing remains in doubt. - Regards.


#134

Short VXF19 (VIX futures) exp Jan 19 $18.90 TGT 16.90 STOP 22.4


#135

Your probably right pref, I thought the exact same earlier. I’m not jumping back in just yet though although that may prove to be a mistake.

Whilst I agree there is no political appetite for Brexit, politics will not want to be seen overruling democracy in my opinion.
So, it’ll have to go back to the people to decide. That would have to include a hard Brexit option.

If parliament ends up keeping us in on their own, we could see yellow jackets in London.

US still a concern, it getting hit again today.


#136

Hi Again @Swamp_Cat,

Well I’ve bought a few things today but nothing you would likely be interested in. Why ?. Because Ive been buying preference shares !. Bought myself a chunk of BWSA, GACB, RSAB, RAVP & STAB. Prices are in the mid 110s and may yet fall a bit from there, but they are all paying 6.3%+ and at at least 7.38p a year in dividends. I figure even if they drop some more they wont go below par and after a year Ill have a nice solid set of low volatility income earners. Have avoided the more expensive ones like LLPC, NWBD & SAN as they have more scope for the price to drop.

Also bought some more TRIG and a biggish chunk of ZWUK. I have 6 planned buys left but am holding off on these to see how things go. Of the things I bought today only really ZWUK has any real FTSE sensitivity.

ATB

Pref (again, but nowhere near as much as before)

PS BWSA, GACB, RSAB & STAB were all ~113.5-118.5 to buy. RAVP was 134 but yield much higher.


#137

Good work there pref, it really seems like your doing good homework. Those are great returns and for what it’s worth, I reckon despite the downside risk, there is likely more upside potential.


#138

Add to that pound is weak against dollar, recently as pound buys more $, lloy has rises too. So the low $:£ “could” be holding lloy down now. You need a clever chap to confirm this though, its just my suspicion.


#139

Yep… and a Remain option.


#140

Hi All,

Well just when I was beginning to think that the FTSE was showing some signs of recovery, with many brexit sensitive stocks doing quite well, US futures dropped like a stone at the open last night and all markets are down significantly again. IG has the FTSE down 1.3% right now and STOXX 50 down 1.5%.

I also found this article by Reuter’s on IG which reckons that the £ might drop by ~3% if the brexit vote fails:-

So I think I’ll probably be holding off on any more FTSE related purchases till after the vote now, but do have some limit orders set to buy overseas stuff. My ZWUK purchase yesterday was probably a mistake, but I did buy it back for ~40p a share less than I sold it for.

ATB

Pref