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Rushman's Rants

24 May, 2017

UK General Elections and the Stock Market

With a UK election coming up soon, it's very easy to get caught up in the hype of what will happen should certain political contenders achieve power, and try to change investment mix based on your expectation of 'what happens next'.  History tells us that in the long run the name on the door of No. 10 isn't the main driver for stock market performance, and very recent history has told us that even up to the closing of the polls it can be far from clear as to what the outcome is going to be.  Whether you guessed right or wrong last time there was a big vote has little influence over your ability to correctly guess the outcome this time, and pinning your family's financial future on your own ability to ascertain the makeup of our next Government doesn't seem like a good plan either.  Here Dimensional Fund Advisers demonstrate that over the long term the risks of following a steady course, and remaining invested through times of uncertainty are dwarfed by the near certainty of losing out by trying to outguess the markets.

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by John Stirling