Britain at the Ballot Box
Britain has entered overtime, as delays saw yesterday’s Brexit deadline drift past. Instead, election campaigning commences, and British stocks hang in the balance again as a new run on power begins between political rivals!
In the blue corner, Tory Prime Minister, Boris Johnson! Countrywide fatigue has given BoJo the high ground on Brexit, an issue he promises to put to bed once and for all. Boris has a reputation for high energy political gamesmanship and brand-building for his cause. A majority for his Conservative government would be a majority for swiftly exiting Europe, and so investors would have to confront their fears as early as January!
In the red corner, Labour party leader, Jeremy Corbyn! His best bet may be a far-left focus on non-Brexit issues, which are suffering an attention-deficit in Britain right now. His socialist campaign trail already showcases his masterplan to make the poor richer by making the rich poorer, including massive structural reforms to the economy (nationalization) and higher taxes for the wealthy. For this reason, a surprise win for Corbyn is a worst-case scenario for investors. The man doesn’t have many friends in finance, that’s for sure!
So, a lose-lose for British assets? Possibly, but when money leaves one area of the market, it goes somewhere else. Some stock pickers are opening short positions, while others are loading up on foreign currency funds to hedge their portfolios against the risk of a falling pound. Heads up, you don’t want to get hit!
