Brexit - Don't Brover-react
With the now imminent departure of Britain from the European Union in play, global markets have responded swiftly with 3% falls starting with the downturn of the Aussie markets last Friday.
The most alarming aspect for the fall is not that it has happened... But that people are shocked by it. It is entirely unreasonable for a major constitutional shake up to occur and for there not to be any correction in markets.
The danger is when speculation and fear compound the decline. Sensational headlines like '50 billion dollars' wiped off the Australian market are ignorant and amount to click bait. This type of fear mongering only promotes senseless chaos - the reality is that the actual process for the exit of the EU is at least a 2 year event. It involves a wide range of trade and currency negotiations. The added muddying of the waters with hype and sensational investment slander is unhelpful.
Volatility is the catalyst of growth. In years to come, these market corrections which are responses to global events will be the springboard for global growth. History tells us this, time and time again. Even the argument 'but this has never happened before' lacks any robust structure. Modern history is littered with thousands of 'first time' events - OPEC oil crisis, Greece debt crisis, global financial crisis - that have been existential anomalies at their inception but markets have steadied and indeed recovered over time.
Sound investment is about tempering as soundly as possible between fear and greed.
As Rudyard Kipling iterated - 'if you can keep your head when all about you are losing theirs... Yours is the earth and everything in it'.
Don't brover-react.
If you are concerned about your investments or want to know more about the global state of affairs... Don't hesitate to give me a call.
James Mousa - 0415 224 586
[email protected]