2 min read

Brexit Fears - What Should You Do?

Featured Image

Yesterday morning, the US awoke to find the rest of the world walking down a very bumpy road. The Brexit conversation is everywhere. On talk radio, all over the major news networks and even your friends and family’s posts on social media feature lots of opinions about what this move means for the markets and for each one of us.

What This Means for You

First, let’s take our eyes off the immediate stretch of potholes and look at the overall path. If you view market news from a broader perspective, especially when the media is reporting particularly steep UK market declines like we’ve seen the past few days, you’ll be reminded that knee jerk reactions to unexpected events can land you in a ditch.

If, you are wondering whether you should adjust your investments in light of the unknown Brexit implications, we’d like to offer some context on why withstanding today’s bad market news can actually translate into good news for you and your investments, at least in the long run.

[minti_pullquote align="left"]“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” - Benjamin Graham, The Father of Value Investing[/minti_pullquote]This week’s market performance serves as an excellent illustration of what that risk feels like when it happens. It hurts, it can be scary and it’s not any fun at all. But if these sorts of realized risks never occurred, sometimes even severely, the market could not be expected to deliver long-term premium returns to those who are willing to ride out the pain.

While we don’t let breaking financial and economic news overly influence our long-term advice, we do find the information fascinating. It also continues to contribute to our ongoing understanding of how markets operate over time. When we encounter these unexpected bumps in the financial road, we don’t stop moving, we proceed down the path knowing that the end goal remains the same.

By stepping over current headlines and the temptation to react to the bad news with active trades you will find that:

  •     By the time you’re aware of good or bad news, the rest of the market knows it too, and already has incorporated it into existing prices.
  •     It’s unexpected news that alters future pricing, and by definition, the unexpected is impossible to predict.
  •     Any trades, whether they work or not, cost real money.

Action Steps

Rather than try to play an expensive game based on information over which we have little control, we continue to recommend investing according to market factors that we can expect to control, such as:

  1.     Minimizing costs
  2.     Forming an investment plan to guide your way – and sticking with that plan
  3.     Capturing returns available by participating in expected long-term market growth
  4.     Maintaining diversified holdings to dampen market risks

In short, if current news makes you want to hit the brakes or veer off course, remember to keep the overall path in perspective and focus on the long-term goals.

[minti_button link="https://www.atlaswealthadvisors.com/contact-atlas/" size="small" target="_self" lightbox="false" color="color-1" icon=""]Need help? See what Atlas can do for you.[/minti_button]