It’s all over the news that the British have decided to leave the European Union. Don’t let this breaking news break your plans.
Markets don’t like the unknown and how this plays out as far as Britain actually leaving the EU is definitely an unknown. We’ve seen markets reacting negatively, as we’d expect, and we expect that volatility will continue for some weeks.
You may hear dire predictions and awful things. Don’t let the news coverage get you too worked up. Remember that the media’s incentives are short term while most investor’s goals are long term. By next month we’ll be hearing about the next event on the horizon that we should be worried about.
Having a broadly diversified portfolio coupled with patience and discipline can help you weather this storm, but we expect it to be fairly short-lived. For investors with long term goals, unfavorable short term events such as this should not have much of an impact. Usually the best thing to do is to ignore these events and stick with your plan. Your long term goals probably haven’t changed because of Brexit. Studies show that reacting to these things by trying to time the market, generally end up being very costly to investors.