62% of personal investors believe the outcome of the General Election will negatively impact markets and 65% are concerned about the prospect of another election in the near future. One in four expect a significant stock market correction in coming months with 29% changing or delaying investment decisions in run-up to election. 35% feel less confident about investing as a result of recent political events.
Personal investors predict that markets will suffer as a result of the political uncertainty caused by the General Election, according to new research by The Share Centre.
The findings echo the results of a YouGov poll, also published today, which has found that wider consumer confidence plummeted as a result of the election.
In The Share Centre’s survey, reflecting the views of around 1,000 of its customers*, 62% said they are concerned that the outcome of the General Election will have a negative impact on markets over the months ahead.
Nearly two thirds (65%) are concerned about the prospect of another election in the near future, with 29% saying they changed or delayed investment decisions in the run-up to the election on June 8th.
With the FTSE 100 undergoing a record-breaking run in recent weeks and other global indices currently trading at high levels, more than three quarters of investors feel that the current rally cannot last for much longer. While 55% believe that any fall in the market will be gradual, one in four are worried that a more significant stock market correction is imminent.
However, 21% are confident that the market will continue to trade around its current level for the foreseeable future.
Investors also commented on the volatility we have seen over the past year, as markets have been rocked by events such as the Brexit vote, the subsequent devaluation of sterling and the election of Donald Trump. 35% said the events of the last year have made them feel less confident about investing, while one in five said they are more reluctant to invest due to the current state of the markets.
29% of investors, however, are prepared to look on the positive side, saying that the volatility has created trading opportunities.
Commenting on the findings Richard Stone, Chief Executive of The Share Centre, said
“Investors were nervous in the run-up to the Brexit vote last year but, with the markets riding high since and the economic data less gloomy than anticipated, many will have breathed a sigh of relief. This survey suggests that newfound confidence has been badly dented by the General Election.
“Investors do not like uncertainty and the prospect of political wrangling, an unstable government and increased doubts over the nature of the Brexit deal we may be able to negotiate have all surfaced as a result of the General Election. Investors clearly feel less confident with more than one in three personal investors expressing that sentiment.
“This is exacerbated by the fact that one in four expect the market to imminently suffer a significant correction from current highs.
“With the market as a whole up over 20% since the beginning of 2016 it is important that investors take a long term perspective of any short term volatility. Where possible they should also consider using tools to protect profits, such as stop-loss limits. The challenge for all personal investors is knowing what the trigger for any correction might be.”
* The Share Centre surveyed 995 of its customers online between 17/06/17 and 27/06/17