Regardless of whether you agree with his strategy or not, it’s clear whatever shenanigans we witness in the political world over the next month is going to have some kind of impact (good or bad) on your portfolio. With this in mind, here’s how I think investors should prepare.

1. Ditch the crystal ball

It is, of course, hugely tempting to try and predict what’s going to happen and adjust your portfolio accordingly. However, if the last three years have taught us anything, it’s that no one knows exactly how this period of political turmoil will end. Our current prime minister might even be gone before 31 October.

This being the case, it’s therefore important to hold investments you’d be happy to stick with for the long term and match your risk tolerance, regardless of any short-term volatility. Leave the high-stakes, might-just-make-a-profit-if-I-time-this-right behaviour to the traders. 

It’s also worth remembering a resolution to Brexit will simply leave a space for some other event or issue to take its place. There will always be something else for markets to worry about. 

2. If in doubt… drip

Having accepted no one knows what’s coming next, it can still be tempting — albeit counterproductive from an investment perspective — to wait until we know for sure. 

As legendary fund manager Peter Lynch once remarked: “Far more money has been lost by investors in preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” The same will surely apply to Brexit.

All stock market journeys are uncertain and it’s for this reason shares give far better returns than any other asset class over time. We’re rewarded for taking more risk than if we’d simply held our savings in cash (not recommended, thanks to the eroding power of inflation).  

This is why drip-feeding money into your existing holdings — or ‘pound cost averaging’ in market lingo — will help avoid investment paralysis. It may feel counter-intuitive, but the message here is simply… keep calm and carry on.

3. Buy the world

There’s a tendency for investors to stick with what they know. That’s understandable considering we may use a company’s products or services on a daily basis, or know more about an economy if we actually contribute to it. Failing to ensure your holdings are geographically diversified, however, can be problematic if the companies or country you’re invested in enter a prolonged sticky patch.

It’s for this reason I’d recommend having exposure to markets other than the UK. This isn’t about attempting to jump in and out of investments to reap maximum profit. It’s about allocating your capital prudently so your portfolio remains stable and you can sleep at night.

Aside from moving some of your cash into economies that couldn’t care less about Brexit, it’s also worth contemplating whether you’re sufficiently invested in assets that, while unlikely to outperform, tend to be less correlated with shares (e.g. bonds, gold).

The post Your 3-step Brexit survival guide for October appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

We gain a lot from being in the EU

I’m thinking not of the European Union, but of Unilever. And there are many others too. Think of Volkswagen or EADS. Would you ever think of breaking Unilever up into the individual countries in which it does business?

What strikes me about the Europe debate is how narrow it tends to be, and how negative. But savvy investors and the companies in which they hold shares know that by being part of the EU, we’re connected to the rest of this great continent. They know the EU doesn’t make Europe more complicated – it actually simplifies it. It links the economies, the currencies and the governments. It also links the companies, the scientists and the stock markets.

Why on earth would you break those links?

One argument for leaving Europe is that it’s very expensive. We say it costs us around 0.5% of our GDP. I work in research, helping academics bring science funding to my university. Much of our funding actually comes from the EU. If we were to leave the EU, the universities would find that their research funding would fall away dramatically, and many valuable research networks would be broken up. We may pay a lot into Europe, but we get a lot in return.

Leaving would be so disruptive

Another argument is the euro. And Europe certainly has been struggling in recent years with the crisis in Greece. I still feel Greece would be better off outside the eurozone. But investors buying shares in European companies, firms doing business in the EU, and holidaymakers know how much trouble a single currency saves them. Whether you’re a bank, a consumer goods company or a retailer, the euro makes life much easier.

But the euro-separatists have an ace up their sleeve: what about immigration? Yes, certainly there’s a lot of migration into the UK – arguably too much. But I think Britain’s job creation machine is actually benefitting because of immigration, and despite the huge influx, the employment rate in this country is the highest since records began.

We would be plunging into the unknown if we left Europe, and such a move would be incredibly disruptive. Now if things were going badly, disruption might actually be a good thing. But after eight long years, Britain is finally booming again. I baulk at the thought of what might happen to the FTSE 100 and the pound if we left, as do many business leaders. I see no point in disrupting things now.

The post Why Investors Want A Connected Europe appeared first on The Motley Fool UK.

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Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

However, it still seems to me that the blue-chip index is stuck in a downtrend and despite the dramatic bounce witnessed last week, I can’t help but feel there will be many more bumps along the road as 2016 comes and goes.

A quick glance at the chart clearly shows the index testing new support levels on its way down. At the same time there now seems to be resistance around the 6,000-point mark – also on a downward trajectory.

Looking forward, there are numerous moving parts that could cause the FTSE to sour further as the year progresses – let’s take a closer look at some of the headline factors that have the ability to move markets…

The elephant in the room

Though bouncing strongly off of its sub-$30 lows, Brent crude has been one of the main driving factors of weakness for the market. As has been discussed before, the market has heavy weighting to the oil & gas sector, even after the share price collapse, both BP and Royal Dutch Shell are still in the top 10 companies by market cap.

I still believe it to be true that the current oversupply needs to work its way through the market before we will see a return to a more sustainable price. That’s a price that encourages companies to continue to drill for oil and ensures that consumers are able to pay a fair price in order to continue to use the commodity economically.

Referendums and elections

As investors have seen in the past, political instability can have a major impact on investor confidence. Let’s face it, markets hate uncertainty. Just in case you thought it was safe to go back into the water, it’s worth making oneself aware of what I believe to be (at the time of writing at least) two of the main political talking points of 2016.

The first date for your diary this year is 23 June – this is when we, the British people, will vote on whether we wish to stay part of Europe. That may be 121 days away, however the political posturing is already building. As we saw in the general election last year, investors saw several sectors sold-off on the belief that there was going to be another hung parliament. But that sell-off turned out to be an opportunity as it became clear that the Conservatives had clinched a majority. I wouldn’t be surprised to see similar reactions as we head to the polls.

Next up, albeit not until November, will be the US Presidential election. With incumbent Barrack Obama standing aside following the conclusion of his second term, the most likely candidates to succeed him at this stage will be either Hillary Clinton for the Democrats, or Donald Trump for the Republicans.

As anyone invested in the pharmaceutical sector can attest, a few words from the US presidential hopeful, pledging to crack down on rising prescription prices and hold drug companies accountable if they raise costs excessively can cause sharp price falls in the businesses operating in the sector.

On the flip side, we could well see a strong finish to the year for shares should Trump enter The Whitehouse, much as we saw in the UK last year.

The post Next Stop For The FTSE 100 – 5,000 or 7,000? appeared first on The Motley Fool UK.

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Dave Sullivan has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

No — completely open markets maximize competition and therefore efficiency, and everyone increasingly gets to enjoy better stuff at lower prices. And that is the one thing that the EU has done for us above all else — the freedom of movement of goods and services has led to a significantly better life than we’d have had if Fortress UK had remained in splendid isolation.

The Bank of England says so

And that’s not just my opinion — it’s one shared by the Bank of England, as revealed in its recent review of the impact of EU membership. The Bank has concluded that the 40 years the UK has been a member have seen increased investment in the UK, an environment better suited to the creation of businesses and jobs, and a big improvement in productivity.

In short, being in the EU has been a very good thing for British businesses, and for the owners of those businesses — and that, dear shareholder, is you!

It hasn’t all been a bed of roses, of course, and the tragedy of the eurozone’s common currency has harmed us here in the UK too, even though we are very wisely not a party to that monumentally stupid idea. But thanks to our long-standing policy of remaining in the EU but out of the euro, the effect here has been considerably lighter than it has across Europe, with the Bank of England having been free to pursue its own economic policies best suited to our own needs. (And booms and busts like we saw in Ireland would not have happened had the Bank of Ireland had the power to set the interest rates the country needed rather than having to kowtow to what the Germans wanted.)

Political worries?

What else might you be worried about? Immigration? Well, that can be addressed by the UK government without leaving the EU. Don’t want to be part of that ever-closer political integration? Fine, we don’t need to leave the EU for that either. Silly EU rules dictating the shapes of bananas or the names we have to use for sausages? Just stop reading the tabloid press that publishes those made-up ‘scare stories’.

Our businesses do need some protection heading into the future, and it’s essential that the eurozone does not slowly become a protectionist zone of its own — in the recent words of Chancellor George Osborne, the EU “should not discriminate against any business on the basis of the currency of the country in which they reside“.

And on that score, the economic crisis might actually act in our favour in our ongoing renegotiation — we can show Germany and France that our unencumbered economic freedom has given us a much faster recovery than within the zone, and that it’s silly trying to pretend that one size really does fit all.

We need to stay in

But in the end, our businesses, our stock market, and our success as investors will suffer should we end up leaving the EU — and it would be a tragedy if the past 40 years of progress were thrown out with the bathwater.

The post Why Leaving The EU Would Be A Disaster For Investors appeared first on The Motley Fool UK.

More reading

• How many investments do you need in your Stocks and Shares ISA?
• Warren Buffett once said he’d put 100% of his net worth in this stock. How’s that worked out?
• How big would a Stocks and Shares ISA need to be to target a monthly income of £3,253?
• How much would an ISA need to double the State Pension and target £25,094 a year?
• A once-in-a-decade chance to buy these S&P 500 shares?

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.