Market Insights: Markets tend to disregard UK General Elections

MARKET INSIGHTS: MARKETS TEND TO DISREGARD UK ELECTIONS

As we have all noticed in recent weeks elections generate lots of headlines. So it might seem like an important consideration when making investments Vanguard have analysed the performance of a balanced portfolio of 60% UK shares and 40% UK bonds between January 1987 and May 2024. During that time, there have been 10 general election periods in the UK (including the election on 4 July). They looked at portfolio performance in the period from the five months before each election to the five months after and then compared this with performance during other times and found no statistical difference in portfolio performance!

They also analysed the performance of UK and global stock markets between January 1995 and December 2023, during which period there were seven general elections. The chart below shows that the elections had a minimal impact on stock market performance.​

Assessing the implications of a new government and then trying to profit by timing the market rarely works, even for seasoned professionals.

Hopefully the above illustrates that planning with your long term goals in mind, keeping perspective and being disciplined are likely far more rewarding. ​
Risks : Buying Investments can involve risk. The value of your Investments and the income from them can go down as well as up and is not guaranteed at anytime. You may not get back the full amount you invested. Information on past performance is not a reliable indicator for future performance. This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security. The views expressed here are subject to change without notice and we can’t accept any liability for any loss arising directly or indirectly from any use of it.
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Gurdev Aujla

I'm Gurdev Aujla, an Independent Financial Adviser at Coleridge Capital. I specialize in providing a holistic approach to financial planning, focusing on retirement, wealth management, financial protection, estate planning, and setting up wills and trusts. My goal is to help individuals and families secure their financial future with tailored solutions.

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