What’s happening in markets?

Investors have been assessing this week’s UK election results, which saw significant losses for the Labour Party. 

So far, the reaction from investors has been mild, with no big changes in the value of the pound, government bonds, and UK shares.

Why elections don’t usually change things long term

Elections can cause short-term ups and downs in markets, but these effects often fade quickly unless there are major changes to government policy. Over time, markets tend to be much more influenced by:

• Economic growth
• Inflation
• Company performance.

Staying focused on the long term

The experts at Coutts who manage your investments with us focus on long-term economic trends, not short-term political events. They are keeping a close eye on the situation, but their investment views and positioning remain unchanged.

That positioning includes investing in stocks worldwide because of solid company performance and a world economy that continues to grow.

In Britain, they particularly like UK-focused companies where they see potential for solid profits and greater impact when the economy improves.

Over longer periods of time (five years or more), investments such as stocks, shares and funds have the potential to give you higher returns compared to cash savings. But the value of investments can fall as well as rise. There is a chance you may get back less than you put in. Eligibility criteria, fees and charges apply. Past performance is not an indicator of future performance and should not be relied on as such. You should continue to hold cash for your short-term needs.