In reading the mountains of commentary and participating in the myriad of conference calls this morning in regards to the Brexit vote which caught the markets by surprise, several analysts have used the term “Earthquake” in describing this event. Repeatedly, the opening words from the R.E.M. hit, “The End of the World as We Know it,” which forms our title above, spring to mind. Predictions of global economic disaster are filling the front pages, and I’m sure there will be much more to come over the following weeks, months and possibly even years.
Unlike an actual earthquake, this event was one where we could actually predict the exact date and time of its occurrence. Indeed, many people looked forward to today knowing the markets would react with great gusto in one direction or another. I think it’s fair to say that few people expected a flat market today… I for one did not.
I don’t want to diminish the size and scope of the event, but in general, we do not expect there to be the deep destruction predicted in many headlines today. However, there are a couple of key points for investors I wanted to pass along:
Overall, today’s market reaction (and the trading rally leading up to it) are examples of emotion taking over in trading decisions and leaving well-reasoned, sound investing principals behind. If history is any guide, emotional reactions such as this often prove as opportunities for those who can ignore their emotions and apply unwavering discipline in regards to their investment plan.
As always, feel free to contact your Cascade Advisor if we can answer any questions and remember:
Plan Wisely, Invest Confidently, and Enjoy Life!