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What Brexit means for investors

A look at what’s changing as we leave the EU this weekend, and what it means for investors.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Plus ça change, plus c'est la même chose.

The French expression roughly translates as ‘the more things change, the more they stay the same’.

After three and a half years of agonising uncertainty and political wrangling, including two general elections and three prime ministers, you may expect ‘Brexit Day’ to feel like a momentous event.

In fact it’s more of a damp squib. In reality, very little is changing in the short term.

What’s actually happening?

At 11pm today, the UK officially leaves the European Union and enters an 11-month transition period. And there’s still plenty to iron out. The terms of the departure have been agreed, but both sides now need to agree what their future relationship looks like.

Until that happens the UK must follow EU’s regulations, and our trading relationship will continue unchanged.

Is anything changing?

The UK’s 73 MEPs will lose their seats in the European Parliament, including Nigel Farage.

There will also be some symbolic changes, like a Brexit 50p coin and the return of the blue passport.

The biggest and most significant change will be that the UK is now free to start negotiating its own trade deals with the rest of the world. As an EU member, we were barred from doing so. We’ll also be negotiating a trade deal with the EU itself.

The nature of these deals will go a long way to defining the ultimate economic impact of Brexit.

What does it mean for investors?

Not a great deal for now.

The big move in the UK market happened when Boris Johnson won a majority in December’s election. His victory provided the certainty the market was looking for over whether Brexit would actually happen, and we saw a bounce in sterling and the share price of companies that rely heavily on the UK economy.

We also saw a surge in investor confidence.

Our HL client Investor Confidence Index jumped by 21% at the start of January, to its highest level since November 2015. There’s also been a resurgence in interest in investing in the UK. UK funds filled the top three spots in our clients’ most popular funds for December.

We think the key for investors is to focus on long-term goals, making sure you’re investing enough to reach them, and that your money is spread across different areas so you’re not taking undue risk.

Read more on diversification and risk in our new Learn section

If you’re looking to add to your investments now the political waters seem a little calmer, our research team have compiled a list of ideas to give you some inspiration. There are funds, shares and investment trusts investing across a variety of assets and markets.

Please make sure you’re comfortable with the principles of diversification, and the risk of any individual investment, before you take any action.

This information isn’t personal advice. If you’re not sure investing is right for you, please get in touch so we can help. All investments can fall as well as rise in value, so you could get back less than you invest. Any income generated will fluctuate too.

Investment ideas for 2020

Our latest investment ideas

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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