Three ways to manage your money in the wake of Brexit

Britain’s decision to leave the European Union has thrown the economy into a tailspin: global stocks are all over the place, the pound fell to its lowest rate in three decades and alternate investments like gold have seen big increases.

Brexit graphic concept
Image: Brian Bevilacqua

While the events of last week’s vote are no doubt historic, it’s important to remember that the Brexit-induced volatility we’re seeing right now in world markets is a short-term phenomenon. The larger implications of the referendum have yet to be felt, particularly here on the west coast where the UK is not a major trading partner.

If you’re struggling to understand the longer term financial implications of the split, here’s my advice:

  1. Take a deep breath and play the long game

It’s not uncommon for the markets to overreact in the immediate aftermath of situations like these. The simplest piece of advice I’ve shared with my clients at Island Savings is to keep a level head and stay the course with your long-term investment plans. When the market is moving quickly it’s not a great time to be making any big changes to your portfolio.

  1. Take another look at your appetite for risk

If you’re heavily invested in the United Kingdom and are feeling stressed, it’s still best to ride out the current turmoil—but you can make plans to take some money off the table slowly over time. Take this opportunity to meet with your financial advisor to re-evaluate your tolerance for risk to see whether or not you’re comfortable with your current level of exposure on the stock market.  Even better, this kind of active management with your advisor means that you’ll also be ready to leverage any opportunities the Brexit fallout brings in the long-term.  The bottom line: any change to your investments should be part of a thoughtful long-term strategy – not the classic sell-before-asking we saw in the markets last week.

  1. Be patient

While it’s natural to want to react quickly, Britain’s exit from the EU starts with a formal notification of withdrawal in the fall, followed by a two-year process of discussion and negotiation to complete. It’s in this time period that you should expect to see more conclusive trends and opportunities emerge.

With a level head and ongoing conversation with your trusted financial expert, you’ll be able to ride out the Brexit storm with your investments intact.