If we had believed the doom sayers (Zero Hedge are you listening?) you would have thought the end of the world was about to land upon us. The markets would crash for all eternity, and western nations would be brought to their knees.
Well, that’s over exaggerated, but so were peoples opinions on Brexit.
Since voting to leave the EU, the UK Markets have hit a new high for the year. The Pound, after an almighty shock, seems to have stabilized, and money on the sidelines, which was scared before the vote, is not scared anymore.
US Markets are pushing multi years highs (or thereabouts). Australian shares are flying. Gold is flying. What was all the worry about?
However there is a real warning to take heed of.
This “Brexit” thing is not something that happens in a matter of weeks. It will take years to unwind. For starters the UK still hasn’t activated article 50, which gives them 2 years to sort themselves out and leave the EU. So, now with a new Prime Minister, they will be working toward that goal.
Then we will have 2 years of negotiation on terms of leaving. New trade deals being formed, and many worries that the market will look to as “uncertain”.
Uncertainty can weigh on the markets heavy. Sentiment is the one and only driving force of the market.
So whilst it’s good that everything is rosy right now, be super aware of the “ugly” situations that are lurking around the corner.
One wrong turn and a sharp fall could happen.
it’s time to be “in” the market, but with your “low risk” hat on.