Elections & Markets

2nd July 2024

As the country heads to the polls on Thursday, a question we have been asked a lot in the last few weeks is “What will a change of government mean for my portfolio?”
Whilst we will have to wait until Friday to find out if we have a new Prime Minister, it is looking very likely that Sir Keir Starmer will be standing outside Number 10 ending 14 years of Conservative government.
In the US, it is once again Biden v Trump and, despite the fact that Donald is officially a convicted felon, with 3 more criminal cases to come, his popularity leads to him being favourite to be inaugurated outside the White House in January as the 47th US president.
So, what will this mean for markets and therefore the value of your pensions & investments?
It may surprise you to know that history tells us that it doesn’t matter who is in charge, markets will do their own thing and are still largely driven by economic rather than political news.
Below are charts produced by JP Morgan to show that in the US and the UK since 1986, there is no correlation between political parties in government and stock market performance:

After a very strong end to 2023 and a solid start to 2024, markets are looking much healthier than 12 months ago, which you will have seen reflected in the value of your investment or pension.
This has largely been driven by inflation falling and interest rate cuts on the horizon, and we see this theme continuing throughout the rest of 2024.
Ultimately what drives the performance of your portfolio is a quality, diversified portfolio matched to your risk profile and time horizon, and patience through tough years such as 2022.
If you would like to talk this through with your adviser, or have any questions, please do not hesitate to get in touch.

The FSWM Team