The United Kingdom has spoken and its decision is for the nation to Leave the European Union. With all of the votes counted in the Brexit referendum, ‘Leave’ was victorious over ‘Remain’ by a margin of 52% to 48%. The result was a surprise to book makers and financial markets, both of which had heavily priced in a status quo result. Equity markets are sharply negative this morning, particularly overseas, and currency markets are quite volatile as they attempt to digest the surprising outcome.
UK Voters have had issues with the trade and particularly the immigration policies that had been imposed by the European Union for quite some time. The populistic belief that they had ‘lost their country’ to immigrants was the overriding reason for the ‘Leave’ vote. In response, Prime Minister David Cameron announced that he would resign and a replacement would be selected by October.
So what now? It should be noted that this will not be a fast process for the U.K. to leave. There is a two year negotiation period in order to establish new trade deals with the remaining EU members, all of which require parliamentary approval. The vote may also lead to other independence votes by other disgruntled EU members down the line, though EU officials will try to suppress these movements by making the terms of the UK’s exit as unattractive as possible. The longer term economic impact on the UK and Europe in general is up for debate, with many believing that all parties will be better off for the split, however short term volatility will likely continue as the details are worked out.
We at Old Second Wealth Management focus on long term investing, and market volatility such as this often presents opportunity to invest at depressed prices. If you have any questions or concerns, please do not hesitate to reach out to your Old Second Relationship Manager or Investment Officer.
Please contact a member of the Wealth Management Department if you have any questions about this information.
Rich Gartelmann CFP® – (630) 844-5730 firstname.lastname@example.org
Jean Van Keppel CFA® – (630) 906-5489 email@example.com
Brad Johnson CFA®, CFP® – (630) 906-5545 firstname.lastname@example.org
Joel Binder, SVP – (630) 844-6767 email@example.com
Jacqueline Runnberg CFP® – (630) 966-2462 firstname.lastname@example.org
Ed Gorenz, VP – (630) 906-5467 email@example.com
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