1st April 2015
Investors should prepare themselves for a rocky ride in the run-up to the election as conflicting economic reports leave the markets in a state of uncertainty, an expert has warned.
The warning follows news that more than 100 business leaders have signed a letter backing Conservative economic policy, while other companies have spoken out in favour of Labour’s policy of staying in the European Union.
Chris Williams, chief executive of investment advice firm Wealth Horizon, Chris Williams, says: “Regardless of their [business leaders] endorsement of Conservative economic policy, the fact remains this is going to remain one of the closest elections in our country’s history. As such, we are going to see larger than usual fluctuations across all markets in the run up to the election which could potentially leave many investors at risk.
“Over the coming weeks we are going to see a host of conflicting information on the state of the UK economy come to light. For example, in a separate report just released, it was revealed that a large majority of prominent UK-based economists disagree with the proposition that the coalition government’s austerity policies have had a positive effect on aggregate economic activity.”
Williams adds: “The mixed messages that are likely to be spun out by all the political parties and their supporters over the coming weeks are going to cause widespread uncertainty for investors. Indeed, if the election does end in a hung parliament, the turbulence in the markets could last even longer.
“It’s important that people don’t leave themselves exposed and prepare for a rocky ride over the next month or so. Investors need to batten down the hatches and diversify their portfolios across asset classes to minimise risk. In addition, after witnessing a record high in UK equities, people need to prepare themselves for what could be a significant fall as we get closer to election day.”