What investors should think about the Brexit decision

Citizens of Great Britain yesterday decided their country would be better off without the European Union and voted to leave the 28-member economic bloc.

Stock markets have sold off in advance of this decision and may continue to be volatile for a few days to a few weeks. However, we don’t think this move will have major or long-lasting effects on the world’s economy or stock markets.

It is likely Britain and the EU will renegotiate agreements to allow continued trade, travel, and immigration. Some have speculated that the exit will strengthen the EU, since Britain’s influence had checked moves towards further economic and political integration among EU countries.

If panic selling takes hold in the markets that could indicate this is a good time to buy stocks, rather than sell. As uncertainties about the effects of the Brexit ease over time it is possible world stock markets will recover and eventually move higher.

Richard Schroeder, CFP®


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