Yesterday, the UK voted to leave the EU. This vote is nonbinding, but the UK is expected to leave the EU. The process of actually leaving the EU is expected to take around two years, during which the UK will negotiate new trade agreements with their trading partners. The British Prime Minister noted that there would be little initial impact on day-to-day activities for UK citizens and businesses. The British Prime Minister also resigned, since he supported remaining in the EU. He plans for his replacement to be appointed by October and will aid in the transition.
Most international markets opened lower and, for European equities, significantly lower. Generally, stock markets have weakened and government bonds have strengthened. Major currencies have also moved, with the British Pound and Euro generally weakening and the Dollar, Swiss Franc, and Yen generally appreciating.
While the event itself is unique, these types of volatile market movements are actually quite common. We consider events such as these within our investment methodologies and long-term investment philosophy. While we cannot predict the long-term impact of the Brexit, we believe that attempting to make speculative changes based on short-term market movements could be detrimental to your long-term investment and retirement success.
For our Premium clients, we continue to diligently manage your portfolio in accordance with our long-term investment strategies, and look to take advantage of opportunities for rebalancing or tax loss harvesting where appropriate. Remember that, though headlines can be dramatic, short-term volatility is a common feature of stock investing. We don’t know with any precision how long volatility will last, but we remain confident in our diversified portfolio approach for the long term.
Disclaimer: The views expressed are for informational purposes only and are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. All expressions of opinion are subject to change without notice in reaction to shifting market, economic, or political conditions. The investment strategies mentioned are not personalized to your financial circumstances or investment objectives, and differences in account size, the timing of transactions and market conditions prevailing at the time of investment may lead to different results. Clients may lose money. Past performance is not indicative of future results. Investments in securities involve the risk of loss. Any tax strategies discussed should not be interpreted as tax advice and do not represent in any manner that the tax consequences detailed will be obtained. Clients should consult with their personal tax advisors regarding the tax consequences of investing.