With just over three weeks until the general election, many investors are wondering how they should position their portfolios with regards to UK domestic stocks.
“A Conservative majority Government is generally perceived to be positive for UK stocks short-term as investors would have some clarity over how Brexit would play out. A Labour win could cause turmoil on the markets given the party wants to renationalise several sectors and shake up taxes.
“At the moment it seems like the market is pricing in a Tory victory thus investors are hoping that increased positions in UK stocks will put them in a good place to enjoy a bounce on the election result. However, a lot can change in politics in three weeks so the markets are likely to remain volatile right up to the big vote.
“The FTSE 250 index has this month traded at its highest level since October 2018 as investors bid up the part of the market which contains a lot of UK-facing businesses.
“Monday saw the FTSE 250 hold its ground at 20,410 with banks and retailers giving support to the index and the pound trading 0.4% higher against the US dollar to $1.2958. The UK currency, which is seen as the bellwether for Brexit, has bounced back since the summer after hitting a low of $1.2022 in August,” says Russ Mould, investment director at AJ Bell.