Never has the phrase “Keep Calm and Carry On” seemed more fitting as an investment principal. After all, the phrase comes from the Brits’ themselves. I wouldn’t be surprised if some of those posters were back up in the U.K. this week.
The world was a bit surprised by the outcome of last week’s Brexit vote. After all, prior to the vote, surveys were showing a clear majority wanted to remain in the EU. But, apparently, those in the “leave” camp were more motivated to go to the polls, partly because of frustration over immigration. And the rest is history.
Now comes the tricky part of figuring out how to unwind the Brit’s relationship with the EU, and how that will affect the economy. Will the rest of the EU Unravel? How will this affect the broader European economy? Will it spill over to the U.S. and the rest of the world?
Unfortunately, it appears that the Brexit may indeed create a long-term headwind for global economic growth. But there is no reason it should create any kind of global melt down.
Global events almost always shock the markets, especially when there is uncertainty as to how they will play out. But markets typically recover from their initial “panic drop” after the uncertainty clears. Remember the “Fiscal Cliff”? The U.S. Treasury rating downgrade? Or the panic over Ebola? They are all distant memories at this point. In hindsight, they were even great buying opportunities.
So we hold on. We ride it out. We keep calm, and carry on.
Might as well keep a stiff upper lip while you’re at it.
If you would like to discuss this article, please call Greg at 316-440-2550.
