Brexit

June 27, 2016

If there is one thing we know about the ability of any of us to predict the future, it’s extremely difficult – nearly impossible.  

 

What we know with great certainty is that we are going to face uncertainty.  We also know that it’s our ability to handle this uncertainty, and to not let it shift our goals, strategies, and behavior, that plays a major role in how successful we are as investors and savers.  

 

Take the June 23rd Brexit vote – when the British voted to exit the European Union.  Most forecaster pundits, as well as investment markets, predicted that the vote would go towards Britain staying in the EU.  Boy were they wrong - and apparently shocked.  Stocks tumbled Friday and continued to fall today in reaction to the surprising vote.  

 

To investors, Brexit is the just the latest in a continual, unpredictable string of market events that results in higher uncertainty and increased volatility.  A former Fed Chairman used to call these periods "times of the unknown unknowns.”  While we at TruNorth Capital clearly stay on top of short run market events, assessing liquidity and trading to make sure that new information doesn’t affect the core ability for markets to function, we are seeing markets continuing to operate properly – albeit trading lower.  

 

The Brexit vote, and other similar negative events that shocked markets, be it the Asian crash of 1997, or 9.11, or the Lehman Brothers bankruptcy of 2008, or the 2010 flash crash, are part of what long-term investors recognize as inherently the most challenging parts of staying the course in investing.  

 

Attempting to time the markets, or to react emotionally in the short run so as to change a long term investment strategy, often results in missing the market recovery when it eventually comes. As the old market adage goes ... in order to time stocks, you have to be right twice – knowing when to sell, but also when to buy back in.  We know with greater statistical certainty that investors who remain in highly diversified global portfolios of stocks, bonds, real estate, commodities, private investments and cash – are more likely to be rewarded with higher rates of growth, than traders or speculators over time.  

 

With the latest market shock coming via Brexit, we know that the short run is likely to continue to be a period of higher uncertainty as the process of the UK withdrawal, and modifying various trade agreements, treaties and other legal processes, is going to start in earnest now.  We will continue to monitor all the events around Brexit to make sure that the market mechanisms continue to function properly.  We remain committed in times like these to be steadfastly focused on long-term, low-cost strategies driven by planning to establish the right goals and objectives for every client.  

 

We stand ready to discuss the recent market events, and help you understand how it impacts your financial goals and objectives, at any time.  Please give us a call if we can be of any assistance.  

Please reload

Recent Posts

February 26, 2019

February 9, 2018

Please reload

Search By Tags
Please reload

  • Facebook Clean
  • Twitter Clean
  • LinkedIn Clean

TruNorth Capital Management, LLC (TruNorth) is an investment advisor registered in, and regulated by, the States of Michigan and Illinois. All clients and potential clients have access to important information about our business methods, fees, professional qualifications and all other pertinent business information. By using this website, you accept our Terms of Use and Privacy Policy. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss.

Regarding the interaction TruNorth or its representatives may have with clients and/or potential clients in ERISA-covered plans, including SEPs, SIMPLEs and non-ERISA retirement plans that are subject to Section 4975 of the IRS Code, including IRAs, Keogh plans and Solo 401(k)s (collectively "retirement plans"), TruNorth may provide non-discretionary investment advice to a specific investor, recommending or suggesting the acquisition or disposing of securities or other investment property in a retirement plan and/or recommending a rollover from a retirement plan to another. During the course of this interaction, TruNorth meets their requirements of a "level-fee fiduciary" and adheres to the Impartial Conduct Standards that require TruNorth to a) provide advice that is in the client's best interest, b) receive only reasonable compensation for its advice and; c) not make materially misleading statements. 

© 2017 TruNorth Capital Management, LLC