Brexit – Questions Answered by an Hargreaves Lansdown financial adviser

Nick Colman
Marketing Manager | Hargreaves Lansdown
20th February 2019
Member roleInitiative member

Whether you voted for it or not, there’s one thing everyone seems to agree on – it’s not going smoothly. With little light at the end of the (channel) tunnel, it can make financial decisions difficult both for your business and your personal finances.

Chartered Financial Adviser, Sian Thomas from Hargreave Lansdown (HL) answers three common questions she gets asked about Brexit.

We hope you find this useful, but remember this article is not personal advice. All investments and their income can fall as well as rise so you could get back less than you invest. If you are at all unsure of the suitability of an investment for your circumstances please seek advice.

Should I invest my money now or wait until after Brexit?

The length of time you’re invested in the market is usually more important than timing of your investment.

The prolonged uncertainty around Brexit has already had an impact on UK stocks, causing many people to lose faith in the UK market. It’s possible things will improve in March when we should have a better idea of how things will look when we leave the EU although prices could fall further.

The UK could actually be seen as an attractive market to invest in because it’s so unloved. If you’re nervous about investing a large amount all at the same time, you can start by investing monthly, which helps spread risk.

READ MORE FROM HARGREAVES LANSDOWN ABOUT THE BENEFITS OF INVESTING MONTHLY IN UNCERTAIN MARKETS

Should I sell UK holdings and invest overseas instead?

One of the most important aspects of any long term investment strategy is diversification. There’ll always be certain sectors or regions that are doing better than others but it all changes as time goes on. But it’s important to remember that it’s a very high-risk strategy to try to guess what’s going to happen to certain sectors or regions in the short term.

Eventually, UK companies will navigate Brexit and hopefully continue to make money, although there aren’t any guarantees.

Currently, the UK market is yielding 4.6%. This is a decent return for those willing to be patient and ride out the ups and downs of the market and don’t need access to the capital in the short-term.

Remember, yields are variable and not a guarantee of what you’ll get in the future. All investments and their income can fall as well as rise in value so you could get back less than you put in.

What if there’s no trade deal and companies go bust?

When there’s a change as big as Brexit, there will be a few casualties. But there will also be those who come out with their noses in front. Whatever the outcome of trade negotiations, some companies will struggle and others will thrive.

If you’re worried about a particular company going bust it can help to have a diversified mix of investments. Plus, if you’re invested in a fund, active fund managers will be constantly reviewing and analysing the investments they hold. They’ll make decisions about how a change in economic climate could impact certain sectors or businesses, and whether to hold or sell them as a result.

Bothered by Brexit?

If uncertainty is leading to indecision, now could be the perfect time to talk to an expert. In times like these it can be hard to know what strategy is right for your goals – particularly if you’re nearing retirement or investing a lump sum.

The experience, expertise and knowledge of a financial adviser can give you the confidence that investment decisions are right for you. If now is the right time to seek expert help then please get in touch. You’ll find out free of charge what’s involved and how we can help.

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