The Brexit vote was not what we expected; but it is the outcome. It will represent turmoil in the markets, uncertainty politically, and volatility in many related segments. How are we affected in the long run - only time can tell, but in the short term we do see opportunities with sudden change. The initial knee jerk reaction will be negative for businesses and sectors with close ties to Britain, but opportunities will be found geographically in other parts of Europe. Other cities and countries will reap the benefits of seeing some of Europe's largest financial institutions re-establish themselves in places like Frankfurt, Luxemburg, or even Dublin with its favorable tax treatments. We are taking an active - though balanced approach - to adjusting portfolios in reflection of these changes.
Our exposure to Britain overall was very minimal, but the knee jerk reaction all markets have had to the news is negative. We sometimes refer to this reaction as the "baby being thrown out with the bath water", it's a purely emotional reaction without any real substantive data to support the decision. Emotional swings in the market don't last long and correct themselves fairly quickly. As mentioned, this can present short term opportunities that some of our fund managers will try to capitalize on.
Clients of Vision Wealth Management Inc. will notice changes in their accounts as we review and rebalance the portfolios to take full advantage of these shorter term opportunities as well as properly positioning ourselves with the right mix of investments for the new look of European markets in the longer term.
We encourage clients and non-clients that would like to discuss their particular concerns over the Brexit news to call in or schedule an appointment with us.
As always - please have a peaceful and productive month.
Marcy Haines and the Vision Wealth Management Inc. Team
Please click on the link below to view the latest LPL Financial Weekly Market Commentary that provides an overview of the past week's market events and insight into upcoming market events. This weekly publication is authored by Jeffrey Kleintop, CFA®, LPL Financial Chief Market Strategist.