Here's what investors would do with a £50,000 windfall

It's been one of the most phenomenal rallies of all-time, something to tell the kids about. In just seven months, between the Brexit vote and mid-January, the FTSE 100 surged over 1,500 points, or 27%, to a record high. And who predicted the Trump rally?

With interest rates at record lows over here, investors have piled into reliable companies paying decent dividends - the so-called bond proxies. Then, the shock Leave vote caused a collapse in the value of the pound - bad for holidaymakers, but great for overseas earners.

Companies like HSBC, Burberry and InterContinental Hotels, who all make oodles of cash outside of the UK, are up around 40% or more since late June. Miners have profited from the strong dollar, too, Chinese growth, a healthy global economy and heavy restructuring.

In fact, four-fifths of the FTSE 100 has made share price gains since June. Well over half have managed double-digit gains. But with domestic interest rates unlikely to rise any time soon - certainly not under current Bank of England governor Mark Carney - and higher borrowing costs in the US almost certain to support the dollar, these multi-nationals remain hot property.

But such demand for a finite number of stocks has triggered a dramatic re-rating, and bears argue that valuations for many look stretched. Earnings must catch up to avoid over-heating, and analysts do tip profits to rise sharply this year.

On Wall Street, banks, industrials and tech stocks have led the Dow Jones to a 12th consecutive record closing high, equalling a record set back in 1987. Over here, it feels very different, like we're at an inflection point.

After hitting a record high last month, stocks have come off the boil, and this month have struggled to make any move above 7,300 stick. This is not unusual. Yes, markets can go on a run, but it has to end somewhere. Question is, which way do we go after this pause?

The £50,000 question

Between 21st and 24th February, we asked over 9,000 investors what they would do given a £50,000 lump sum to invest now. Here's what they said:

You can take these results in two ways. Bulls would point out that two-thirds of investors would invest at least half the money in equities, despite the recent rally and major concerns about Brexit and Trump.

An impressive 93% of respondents said they would invest at least some of the windfall in shares, with less than 7%, or 1 in 15, reluctant to invest anything in equities.

That almost 82% would keep at least some cash in the bank is perhaps food for the bears, as is the insistent of 64% that at least half the money would remain in cash. Of course, we don't know for sure, but one assumes that money would find its way into the market on any pullback.

What next?

Well, we're just weeks away from triggering Article 50, setting the clock ticking on the UK's exit from the European Union. It's unclear how this will impact markets despite resilience since last summer's vote. We also have elections; first the Dutch, then the French and later this year the Germans, which could prove unsettling.

Crucial in the short-term is Donald Trump. The president addresses Congress for the first time tonight - at 2am London time - and the discussion is now around any detail on spending plans, tax cuts and lighter regulation.

If he reconfirms those election promises, expect a positive reaction on Wall Street and in London Wednesday morning. With technical indicators turning negative, however, any hint Trump is diluting policy pledges to secure approval from politicians would go down badly.

As well as the big three issues above, look for any comment on the pro-American border adjustment tax, repeal of Obamacare, amendments to trade agreements and immigration.

That the FTSE 100 is currently up only 1 point and Dow futures confirms that traders are sitting on their hands until they learn more about the unpredictable showman Trump.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.