Despite the polls and the betting odds, the man in the street has voted with his feet. My job is to help us to benefit from this situation. I had positioned our portfolios prior to the vote to be safer but neutral on the outcome. If I would have speculated on a result, I would have gone the right way, but from the tight outcome I could have just as easily got it wrong.
Cash is King
The cash reserves I built up within all of our portfolios now looks like a sensible measure. I admit I was feeling the pressure as the markets rallied throughout this last week as it looked certain we would remain. I thought my buying chance had gone.
I’m an investor not a speculator, large gains and loses are being made as we speak by traders. The largest faller from the FTSE 350 was Redrow homes. It sank by over 75% first thing this morning to £1.00 a share and is now back to £3.41. Up almost 250%! One person loses 75% and panics whilst another holds his head and gains you may think. But no. All this volatility is created by automatic trading strategies on computers, that are programmed to buy and sell in a fraction of a second.
Today will be a waiting day. Already the FTSE 100 is back above 6000 points. There is a chance it won’t hold. As I guessed, the German stock exchange has fallen further. I will wait for the US markets to open this afternoon and It is very rare I place a buy or sell order on a Friday. A lot can change over any weekend.