How Should Investors React to Brexit Result?

Dan Kemp of Morningstar says investors need to keep cool calm heads amid political and financial uncertainty as to what happens next, following the Brexit vote

Dan Kemp 24 June, 2016 | 10:37AM

 

 

Dan Kemp: As Brexit becomes a reality, savers and investors are faced with two very important questions. The first is, what does it really mean and second, how should they respond?

Now, the first question is much more difficult than the second. The range of potential outcomes during this period of uncertainty is incredibly broad and investors shouldn't underestimate the types of things that can happen as we go through this bumpy period certainly over the next six months and possibly over the next couple of years. The danger in this situation is that you make decisions too early and with too much confidence. We really don't know what's going to happen on the political and economic landscape over the next few months.

But when it comes to how we should respond, the path is much clearer. Investors shouldn't react too quickly but instead should do their research to really uncover the opportunities that this period creates. Leave shorting and short-term market movements to the traders and the experts. This is about long-term investment, not short-term reaction.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Dan Kemp

Dan Kemp  is head of investment consulting and portfolio management, EMEA, Morningstar.