Markets rarely like political uncertainty and often prove volatile in the run up to and after elections, especially if the outcome is considered unlikely to benefit the economy.
Political uncertainty

Plan your portfolio for
political uncertainty

Political uncertainty

​Plan your portfolio for political uncertainty

Investors will be naturally concerned about the effect that triggering Article 50 will have on financial markets. We therefore want to assure you that although we cannot provide investment advice, Barclays remains committed on delivering the best service for its customers and clients by providing tools and research to help you manage your accounts during periods of political uncertainty.

How to prepare for stock market volatility

Volatile financial markets are an inevitable part of investing. They key questions though for many investors are often:

  • Should I hold steady?
  • Should I sell?
  • Should I invest?

We discuss how investors can deal with volatility in a changing markets, in an interview with Will Hobbs, our Head of Investment Strategy for Europe, and Dr. Peter Brooks our Head of Behavioural Finance.

Why diversification matters

Ensuring your portfolio is properly diversified by investing in a combination of shares, bonds, property, commodities or cash can help reduce overall risk and volatility caused by political uncertainty.

As your money is invested across several different asset classes, if one of these fares particularly badly, the overall impact on your returns will be lower than if you had invested in this asset class alone. Of course, the opposite effect also applies: If one asset class performs well, the favourable impact on your returns will be lower.

You may also want to consider holding funds invested in different geographical areas, to further spread risk and protect you from stock market falls. Bear in mind however, that this does expose you to foreign currency risk. This means that when sterling is weak, your pounds will buy you fewer foreign currency denominated investments. However, if you already have overseas investments, lower exchange rates can work to your benefit, as this will boost their value to you.

Bear in mind of course, that volatile share prices could offset any gain or loss from currency movements.

Avoid panic decisions

When the stock market rollercoaster ride can seem hard to stomach, remember that often the worst thing you can do is to panic and sell out of your investments. By doing this you will crystallise your losses, whereas if you are able to sit tight during the bad times, you may, in time, be able to benefit from any recovery.

Dipping in and out of the market and trying to pick the best times to invest is an extremely risky strategy, as no-one knows for certain which way markets are likely to move next.

Dipping in and out of the market and trying to pick the best times to invest is an extremely risky strategy, as no-one knows for certain which way markets are likely to move next.

Bear in mind that this article is for information purposes only. If you’re unsure, seek independent financial advice.

As always, make sure you have as much information as possible before you make any decisions about your money. No matter how you try to protect yourself from uncertainty or otherwise, investments’ values can still fall and you might get back less than you invest.

Want to learn more?

If you’d like to learn more about coping with market volatility and the tools available to help you review the market and feel more confident when making investment decisions.

Investing during market volatility

Education and insight

Our articles below offer education and insight to help guide your investment decisions when markets are volatile.

Should you buy more shares when the price is falling?

When a company’s shares tumble, existing investors are often tempted to add to their holdings. But that may be a bad strategy.

Should you buy more shares?

5 lessons for investors in turbulent markets

When markets are volatile, they have the potential to spook investors. What should investors do in the face of all this possible turbulence? Here are five key points to bear in mind.

5 lessons

Managing risk and investing efficiently

It isn’t possible to avoid all the risks you’ll be exposing your money to over the course of your investing life, but there are many ways you can reduce and manage them.

Managing risk

Six expert strategies on how to invest

Over the years many of the world’s best-known investors have offered nuggets of wisdom in a bid to try and help individuals become smarter investors. We look at some of their quotes and what we can learn from them.

Six strategies

Guide to building a balanced portfolio

Market volatility is always unnerving for investors, but building a balanced portfolio can help protect you from stock market storms.

Balanced portfolio

Reviewing your existing portfolio

Successful investing isn’t just a question of allocating your savings to various assets and then sitting back to wait for the profits to roll in. If only it were that simple.

Reviewing your potfolio

Market review and analysis

If you’re interested in reading more about how political events and fiscal policy can affect investors, our articles below offer additional analysis and insight.

Fifteen years of the euro: Where next for Europe’s currency?

Euro notes and coins began to circulate in Europe at the beginning of 2002. Since then, the currency has endured somewhat of a rollercoaster ride, but arguably faces some of its greatest challenges yet.

Fifteen years of the Euro

France at a crossroads

French voters face a stark choice in this spring’s presidential election – between a centrist reformer and a far-right candidate seemingly intent on pulling the country out of the euro.

France at crossroads

2017: The year of the Trump trade?

Staying focused on economic fundamentals is important against the rise of protectionist policies and a noisy political backdrop.

Trump trade?

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Remember:

  • The value of your investments can fall as well as rise and you may get back less than you initially invested
  • Investing is not for everyone, if you are unsure please seek independent advice.

Remember:

  • The value of your investments can fall as well as rise and you may get back less than you initially invested.
  • Investing is not for everyone, if you are unsure please seek independent advice.

Open an account

Log in to your account

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