Politics and #investments #GE2015
The stock market has been a little rocky as investors wonder how the general election result will affect their investments. The minimum wage might go up and put a strain on those companies that have a lot of low paid staff. However, many of those companies will benefit from increased sales.
The cuts have meant government departments have reduced staffing and so have councils. Self employment and zero hours contracts have increased. Is this good for business? Thriving small businesses generally means more money being spent on services, such as building work, new kitchens and the like and so that money in turn isn’t spent on imported goods like champagne, (that some politicians are so fond of). More money in the bank accounts of the poorest in our society could benefit us all and boost prospects for some retail companies. I think it would be very good for the supermarkets like Morrison’s and Tesco. It could mean them spending more on advertising, so it could be good for ITV. Politics does make a difference.
The promises to build more homes, could be good for construction companies like Taylor Wimpey and Barrett.
If plans for more austerity go ahead, companies that provide the basics that people need, like water, energy, housing, food and communications could lose out as demand is cut. The homeless don’t pay for water, energy, housing or communications and can barely afford food. People just surviving on minimum wage only just afford these basic services and if they get into debt because of unemployment or ill health, they frequently default. Politics is often based on human emotion or greed; maybe we should think logically?
Maybe, we should think about our investments before we decide who to vote for? Liquidity in the economy has shrunk since quantitative easing ended and without that liquidity, trade becomes difficult. Too much liquidity on the other hand removes the incentive to compete.
What do you think? Will politics effect your investments? Please share those thoughts in the comments box. You can also subscribe to this blog using the widget at the top of the sidebar. You can follow me on Twitter too.