Brexit: What it Means for us
Brexit has caused a bit of a rift on global markets. At the end of June, Britain voted to leave the European Union. There is a lot of speculation as to how this will impact us in the United States, and currently the world markets are still rattling with the vote to leave. So what does that mean? Short answer: it depends.
The Impact of Brexit on the UK
The United Kingdom is still reeling from the vote to exit the European Union. Immediately after the vote was finalized, David Cameron resigned as Prime Minister. Theresa May was appointed by Queen Elizabeth to succeed Cameron on July 13. She has stated that she has no intention of reversing the public vote to leave the European Union. However, she has also indicated that she is in no hurry to do so.
Additionally, in the wake of Britain’s exit from the EU, the vote to leave has been challenged. A court hearing is scheduled for October 13. This hearing will be held to determine whether or not Britain can proceed with the exit without Parliament’s authorization. Government lawyers are expected to argue that the Prime Minister can use Royal Prerogative powers to begin the process of withdrawal from the European Union.
Brexit Impact on Global Markets
The British pound is still losing value compared to the United States dollar. Interest rates and yields on U.S. treasury bills have also fallen. It may take years to find out the long-term repercussions of Brexit. Some financial experts forecast a hard-hitting recession in the UK as a result of the vote. However, to insure minimal impact to your portfolio, there are a few steps you can take. First, make sure you diversify your portfolio. As long as you don’t over-concentrate on investing in one country, your investments should recover quickly. Keep a global diversification plan in place, and don’t put too much emphasis on current news headlines to make your trading decisions. Rather, think global and long-term to protect your assets. For more information on the best way to diversify your portfolio, speak with your financial adviser.
In the grand scheme of things, there is still so much up in the air regarding the British exit of the European Union. It is still possible that a second vote will repeal the British exit. There are a lot of “what if” scenarios that are fruitless to speculate upon. Cast a wide net in terms of investments and think globally instead of focusing on one place to help protect your investments.