June 27, 2016
On Friday, June 24, the global economy reacted to Britainâ€™s unprecedented decision to exit (â€œBrexitâ€) from the European Union (EU) with disbelief and a feeling of uncertainty not experienced for decades.
Initially sparking a rise in market volatility, the Brexit decision has also sparked concern for many American investors who are understandably unsure of how the change will affect their portfolios. Many are even considering hasty actions that may drive results in the short-term, but may not benefit them in the long-term.
During this unclear time, itâ€™s important to remember that your portfolio is globally diversified to get through times like these. I caution against reacting to what is likely to be short-term volatility. My clients investing and saving for retirement and other long-term objectives should view the turbulence with an understanding that it is a short-term market disruption, not the state of the market for years to come.
A market selloff is typically a buying opportunity or a reason to do nothing. At the end of the day, please remember that this is just the beginning of what will be a long process for the EU. The U.K. will gradually negotiate the terms of its exit over a period of two years and in the interim, will stay in the EUâ€™s free-trade zone. Corporations doing business in the U.K. and the euro area will remain focused on revenues and profits.
Please call our Pittsford office at (585) 249-1030 or our Webster office at (585) 671-1532 if youâ€™d like to discuss the Brexit decision in greater detail.