Should Events Like The Brexit Affect Your Investment Decisions?
You’ve probably heard plenty about the Brexit – the vote by the people of Britain to depart from the Eurozone – and when the news broke, the stock market responded with poor performance initially. At the same time, the media also responded with doomsday predictions of the long-term effects this would have on the economy.
When the media and stock market has such a strong response, you’re probably wondering how should events like the Brexit affect your investment decisions.
Here are some focal points to consider:
After the initial hype and market noise, the S&P 500 (a major benchmark for the US stock market) recently rose to a new, all-time record high. Outside of the recent Brexit performance, the same eventual recovery and new record high has always occurred after a global event affected the stock market.
Although there will likely still be effects on the global economy, this highlights yet another instance where you should not let events like the Brexit affect your investment decisions.
The value of long-term investing
Quite simply, if you were tempted to sell your stocks during the Brexit aftermath, you could have sold your investments at a low, and erased all your previous gains. To make matters worse, you would have lost out on the eventual stock market recovery and new high that your diversified portfolio would’ve experienced.
Although this seems like quite the spectacular turn of events, the same eventual recovery and new market high has always occurred after an event like the Brexit.
Utilizing a financial advisor when you’re tempted to let events like the Brexit affect your investment decisions
At LexION Capital, we rely on Nobel Prize-winning academic research to make our investment decisions, not short-term reactivity or media hype. Our clients benefit from rational thinking and a long-term approach to reach their goals, even when events like the Brexit tempt them to do otherwise. If you’d like to learn more about our goals-based approach to investing, don’t hesitate to reach out today.