Why your investment plan is the same whoever wins the general election

There’s not long to wait until the UK electorate heads to the polls for the 2024 general election.

Back on 22nd May, Rishi Sunak stood at a rain-soaked Downing Street lectern to announce the early summer election and kickstart the seven main parties’ bids for victory. Now, after a hard-fought – and occasionally bitter – round of TV debates and manifesto launches, you’ll be eagerly awaiting the outcome… and the end to the TV coverage.

You might also be wondering how the outcome of the election will affect your long-term financial and investment plans.

Keep reading to find out.

Your investment plan will be based on your risk profile and long-term goals

When it comes to your long-term investments, the Jane Smith message has always been clear – keep calm and carry on.

Through working with us, you’ll be confident that you’re asking the right questions and that the plan you have in place is right for you. We’ll encourage you to consider:

  • What are my long-term goals?
  • What’s my attitude to risk?
  • How about my capacity for loss?

These questions are intrinsically linked. Your overall goal will determine not only the timescales of your investment but also the amount of risk you are willing to take and your capacity for loss.

An investment for a child’s education, say, might have a shorter timeframe than saving for your own retirement. You might also be willing to take a greater level of risk during the decades until your retirement date than you would with a shorter-term investment for your child’s future.

Whatever the answers to the above questions, the plan we help you to put in place will be:

  • Aligned to your long-term goals with an investment term of at least 5 to 10 years at the outset
  • Risk-managed and diversified, and designed to get you to your goal while taking the least risk possible
  • Robust enough to cope with short-term market dips caused by global events or national politics

Once your plan is in place, you’ll need to stay calm and remain focused on the long term.

Ignoring the noise of short-term dips and focusing on your goal is key

2024 isn’t just an important year in UK politics. Across the world, more than 60 countries will head to the polls before December, with almost half of the global population eligible to vote somewhere.

If ever there was a year to focus on the long term and try to ignore the noise of global politics, 2024 might well be it.

Remember that markets fluctuate daily and that short-term dips are factored into your plan – they’re the reason we advise investing for the long term in the first place. The longer time frame gives your fund plenty of time to recover should market dips hit.

We also diversify your portfolio to ensure that your investment risk is spread. It’s hoped that falling prices in a specific asset class, sector, or geographical region will be offset by rises elsewhere.

With decades of experience in the market, we can help you:

  • Stay calm and avoid emotional knee-jerk reactions that could have serious long-term consequences
  • Understand the biases that might hamper your judgement and see you chasing investment trends or becoming sentimental about underperforming stock.

Finally, we can provide ongoing reassurance that you remain on track to your long-term goals.

Historically, the market trends upward, regardless of general election results

This illustrative graph from Timeline shows the inferred growth of £1 invested in 1926. It shows not only the general upward trend of the market over the last 98 years but also the changes in prime minister and party in charge during that time.

Source: Timeline

Note: All investment income is assumed to be reinvested, unless otherwise stated. No transaction costs or taxes are included.

Market dips have occurred at various points, not least over the last couple of decades. War in Iraq, the global financial crisis, and the coronavirus pandemic hit markets in the short term.

This confirms something that we already know – markets like certainty. And elections (whether they are close or less tightly contested) inevitably create a level of instability, which only makes it all the more important that you keep calm and carry on.

Generally, markets continue to rise regardless of election years, and even the winning party.

So, whether you need help or reassurance, remember that we’re always on hand to help.

Get in touch

If you have any questions about your investments or how the future of the UK economy could affect your long-term goals, speak to us now. Please contact us on info@janesmithfinancial.com or call 01234 713131.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

More stories

24 May 2024 News

12 surprising things you might not know about Jane Smith Financial Planning

Read more

24 May 2024 News

10 surprising estate planning facts and why they matter to you

Read more