Tag Archive: FTSE All-Share

  1. Investors shouldn’t worry – the FTSE will continue to rise whoever is in Government

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    Theresa May shocked many pundits when she announced a snap election, giving the public 50 days to decide who should lead the UK through the Brexit negotiations and onwards for the next five years.

    It’s easy to assume that the policies of the winning party will, to follow the well-worn phrase, ‘impact the market’ in different ways depending on who triumphs in June; thereby influencing the performance of our pensions, ISAs and other investments.

    So how should investors react? Specifically, what influence does the resident of Number 10 have on how we should invest? Does the election mean a rethink of retirement planning and investment strategy?

    Surely, the policies of a Conservative government affect the economy and the returns we achieve on our investment portfolio differently than if the Labour or Lib Dem party were in power?

    The data says otherwise.

    The chart below shows the total return of the FTSE All-Share index from 1955 to the present day, and the relative government in office during that time.

    It’s no surprise that the overall trend is upwards, whatever the political climate. Through Conservative, Labour and Coalition periods in office, the FTSE All-Share has shown sustained growth.

    Looking in more detail, the index approximately doubled during Labour’s 13-year government, which of course included a huge financial crash; and the market is on course to roughly double again in the following eight or so years of Conservative-led governments. No clear trends to follow so far.

    What if we look at the average FTSE All-Share monthly returns for each of the parties?

    Can we draw any conclusions from this? None that I would rely on for my investment strategy.   While the Conservatives have a history of higher monthly returns, their sample size is much larger, which must be taken into consideration.

    When Warren Buffet was asked his favourite holding period for shares, the legendary investor replied: “Forever.” If someone of his stature isn’t bothered about who’s in the White House, perhaps we shouldn’t worry about the occupant of Number 10 either from a financial planning perspective.

    Timing is Everything

    While elections themselves and the relative hue of the governments that followed have had little distinguishable impact on stock market performance, an interesting piece of research by Fidelity indicates something much more pertinent to focus on.

    The study focused on the impact of market timing on returns over a 15-year time frame. It highlighted the effect of an investor missing the best 10, 20, 30 or 40 days in the market and compared this with annualised returns if they had been fully invested all along.

    The message is clear: if you try and ‘time the market’ (consistently switch the shares in which you’re invested in anticipation of rising prices) and get it wrong by just 10 days, you could be looking at a reduction in your returns of over 60 per cent.

    Miss the best 20 days and you’ve gone from making money to losing money.

    It’s also important to remember that timing the market increases the costs and taxes associated with your portfolio, and subsequently has a drag effect on your returns. Looking at both sets of data, it appears that who’s in your financial planner’s chair will affect your investment outcomes rather than who’s in Number 10… something that’s worth remembering over the coming weeks of headlines and opinions.

    If you have any questions regarding the above or any other Financial matters please call us on -01793 771093

    Click here to read more of Warren’s Articles from the Independent 

  2. The New £1 Coin

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    With the excitement surrounding the issue of the new one pound coin, I wondered how much I would have today, if I had invested 10,000 of them into the FTSE All Share index when the pound coin was first launched.

    The one pound was introduced on 23 April 1983, when Lady Thatcher was Prime Minister, seat belts became mandatory for drivers and front seat passengers and the first episode of Blackadder was broadcast on BBC One.

    The FTSE All Share has returned a whopping 3000 per cent over this period, averaging 11 per cent a year, now considering this period covered the ‘dot-com bubble’ in 2000 and the Financial Crisis in 2007/8, it’s been a roller coaster of a ride for most investors, but a return you would ultimately be pleased with.

    Not all years have been great during this period, although the average return was 11 per cent, the worst one year return was almost minus 33 percent in February 2009 and the best was 47 percent in February 2010.

    After all the ups and downs in the market, how much would my £10,000 would be worth today?  £340,000 a very nice return for those who remained invested.

    What investor lessons can we take away from this?  Markets rise and markets fall, they repeat this again and again.  Investors are rewarded for their participation in the markets and the wise investor buckles up and sits tight.

  3. Market Update

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    ‘Sell in May and Go Away’ is a trading maxim which, according to Investopedia, encourages an investor to “sells his or her stock holdings in May and get back into the equity market in November…” Traders who adhere to that adage may be pondering averages and the many exceptions right now. During the first two weeks of the month, the Dow Jones Industrials Average, the Standard & Poor’s 500, and the Russell 2000 Indices all reached new highs – with the FTSE 100 and FTSE All-Share within points of all time highs. The FTSE 100 passed 6,600 and the Dow passed 15,000.


  4. Market Update

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    Like athletes testing their limits, the FTSE 100 and the FTSE All-Share Indices both almost hit new highs last week. The FTSE 100 closed the week above the 6,500 level for the first time in a while. Strong corporate earnings and good news from Europe helped support last week’s strong performance.


  5. Market Update

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    Lexington observed that just like winded runners, stock markets slowed at the end of last week. Since the start of the year, the FTSE All-Share Index has risen over 10 percent, hurdling past new highs several times.


  6. Market Update

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    During periods of strong market performance, like the one we’ve experienced since the end of last year, it’s important to remember that markets ebb and flow over time. Since December 31, 2012, Lexington can confirm that the FTSE All-Share Index has gained 10.7 percent and the Standard & Poor’s 500 added 8.8 percent. Last week, the FTSE All-Share reached highs last seen during 2007, and the S&P 500 ended the week less than one percent from its record high, which was also realised during 2007.


  7. Market Update

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    Lexington felt it was a bumpy week for stock markets. Early on, markets in many countries were negatively affected by the outcome of Italian elections. Italy’s anti-establishment Five-Star Movement, led by comedian Beppe Grillo, won about one-fourth of the votes in both the country’s upper and lower houses. Markets lost value as investors anticipated political gridlock could delay Italian economic reforms. Since Italy is the third largest economy in Eurozone and its public debt is significantly higher than its Gross Domestic Product, political stalemate in Italy could negatively affect the Eurozone.