Brexit bedlam: Industry impact
Britain’s vote to leave the EU has thrown markets into turmoil and prompted a flurry of calls to advisers and analysts. Here’s how experts are calming the waters and preparing their clients for the months ahead.
"My conversations today have been about grabbing some of the higher-yielding fixed annuities as bond alternatives as the U.S. 10-year dropped to 1.54% this morning. Insurance companies have traditionally been slower to move and today’s higher rates might be available until next week or even after the [Fourth of July] holiday."
"By and large, clients remain very calm and understand our methodical, long-term approach… We will definitely be looking for buying opportunities, but not until the short term volatility settles."
"This volatility is not all a surprise. We go into this already fairly conservatively positioned. We are not going to get out of the way of this, but we are not exposed to the full force of it."
"Europe, the U.K., the U.S. and the rest of the world will adapt to the new reality. As for the markets, they discount the future and will absorb and reflect the implications of Brexit relatively quickly. So it's best not to extrapolate what happens today or next week very far into the future. In the end, broad diversification coupled with adequate cash and bond reserves will carry us through any short-term dislocation we may observe as a result of Brexiting Brits."
"We invest a lot of time upfront with our clients to gauge their risk tolerance and position them accordingly, so unless their risk profile has changed, we would encourage them to not be reactionary. Brexit could mark the beginning of the end of the EU as other countries may now hold their own referendums, creating a domino effect."
"For our clients we advise, 'Concentrate on what we can control in the markets; rebalance the portfolio; dollar-cost average into the markets and practice patience.' These are the keys to creating long-term wealth appreciation and a better investment experience, regardless of Brexit in or out."
"My advice to clients has been to do nothing and, if equity markets tank sufficiently, we will rebalance and buy the dips. However much short-term disruption there may be, my hunch is it's just a blip in the long term."
"The U.K. is about 4% of the world economy, and it doesn't leave the EU immediately. So we believe the economic impact is likely to be much less than the market reaction suggests."
“It could create some opportunity to buy some high-quality companies in Europe after things settle a little bit. You have to remember that those are global companies that sell everywhere.”
Brent R. Brodeski
"Each year investors end up getting a variety of curveballs tossed their way. Last year it was China, the year before Greece and this year Brexit. While this may permanently impact the Brits in many ways, a few years from now it will merely be a footnote in stock market history.”
"Most of our clients like to sleep through market upheavals and go with the safety of large allocations to bonds, although they realize this will limit growth when the stock market is hot. Fortunately, those clients are relatively sitting pretty with the Brexit vote."