Here, we look at how and why markets are in such turmoil....
What happened to the stock market last Friday?
News that there was no outright winner of the election prompted the FTSE 100 of Britain's biggest companies to slump more than 2.6%, wiping £35 billion off the value of shares and taking a five-day run of losses to an eye-watering £110 billion.
As it emerged that no party had a clear majority, the FTSE 100 index plunged as much as 4%t to 5,045, before ending the day 137.79 points lower at 5,123.02 - its lowest level since February. The FTSE 100 is now 12.2% below its 52-week peak of 5,834, which was set on April 16.
Banks were among those hardest hit, with Barclays finishing 6% lower on Friday, with Royal Bank of Scotland and Lloyds finishing 5.7% and 5.5% down respectively.
Why were shares so hard hit?
Stock markets were already jittery in the run up to the election due to worries about the debt crisis in Greece, and further uncertainty created by the election result prompted the huge sell-off of shares. Other European markets also fell, with France's Cac 40 index down 4.6% and Germany's Dax index down 3.3%.
The market volatility is down to concerns that any incoming government without a clear majority might not be strong enough to deal with the UK's national debt. Markets would suffer even more if a coalition government forms and fails in a few months, resulting in a new election being called.
The last time we had a hung parliament, more than three decades ago in 1974, the FTSE All-Share Index fell nearly 15% in a month, and ended the year more than 50% below where it started. That is not to say we will experience the same dramatic falls this time round, as the economic circumstances were very different then, but until the political situation stabilises, many are predicting a rocky ride ahead.
Gavin Oldham, chief executive of The Share Centre, said: "Markets really dislike uncertainty, and this result is about as uncertain as you can get. Shares are therefore likely to remain volatile for several days until a sense of direction emerges."
What about the impact on the pound?
Sterling was hit hard by the uncertain result too, and experts are predicting further turbulence ahead.
The pound plummeted to a 13-month low against the dollar on Friday, at one point dropping to below $1.45. It also fell to under 1.14 against the euro, before clawing back some losses to reach 1.159 euros.
Duncan Higgins, senior analyst at foreign currency specialists Caxton FX said, "The political wrangling will begin in earnest this week, and credible signs of a working government could still be days, or even weeks away. In that time it is unlikely that we will see much reprieve for sterling.
"The uncertainty surrounding the next government has simply compounded pressure on sterling, and against the dollar it is continuing to drop. With the ongoing crisis in the eurozone and its longer-term ramifications also in focus, we are not too optimistic about sterling's short term prospects."
Unless the political situation stabilises quickly, and the new government makes a clear plan as to how it will tackle Britain's debt problems, the UK's credit rating could come under threat, which is likely to undermine the pound further.
Unfortunately all this is bad news for holidaymakers, who will see their spending power reduced while they are overseas.
I've heard gilts are also affected?
Yes - the rollercoaster ride experienced by stockmarkets on Friday also extends to gilts.
Gilts are, very simply, units of debt issued by the government. When you buy gilts, you are effectively lending money to the government, which promises to pay back the amount in full at a set date, along with interest.
Following the election result, gilt prices fell and yields rose. Simon James, founding partner of Gore Browne Investment Management said: "None of this is good for gilts or sterling in the short to medium term. Strong governmental leadership will be needed to deal with the problem of British indebtedness - not just the national debt, but also private debt."
It's not necessarily all bad news however, as if gilt yields continue to rise, this could enable insurers to raise annuity rates, meaning a better income for those about to retire.
Craig Fazzini Jones, director at retirement planning specialist MGM Advantage, said: "The stock market has taken into account the hung Parliament as an indicator of increased indecision in Government. Gilt prices have fallen and yields risen which we expect will have a positive impact on annuity rates - especially when you combine this with the fact that the Bank of England is purchasing fewer gilts and there is a renewed focus on inflation risk.
"If annuity rates do rise, this will come as welcome relief to the annuity sector because rates in general have been falling."
Is any of this likely to affect interest rates?
Yes. If sterling continues to fall, then the government might have to increase interest rates to defend the pound.
While this would be good news for savers, who have had to endure savings rates at historic lows due to the Bank of England base rate being held at 0.5% since March 2009, it is not so positive for borrowers. This added to instability in the wholesale money markets could well push up the cost of mortgages for homeowners.
What does all this mean for investors?
Anyone with stock market investments, including those with pensions, is likely to face a very bumpy ride ahead, at least until we have much a clearer picture of how the new government is going to work.
Those with cash savings won't be affected - unless interest rates rise in the future - which at long last will mean higher savings rates.
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