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By Morningstar | 06-24-2016 06:00 AM

How Should Investors React to Brexit Result?

Investors need to keep cool calm heads amid political and financial uncertainty following the Brexit vote, says Dan Kemp of Morningstar Investment Management.

Dan Kemp: As Brexit becomes a reality, savers and investors are faced with two very important questions. The first is, what does it really mean? And second, how should they respond?

The first question is much more difficult than the second. The range of potential outcomes during this period of uncertainty is incredibly broad, and investors shouldn't underestimate the type of things that can happen as we go through this bumpy period, certainly over the next six months and possibly over the next couple of years.

The danger in the situation is that you make decisions too early and with too much confidence. We really don't know what's going to happen on the political and economic landscape over the next few months.

But when it comes to how we should respond, the path is much clearer. Investors shouldn't react too quickly, but instead should do their research to uncover the possiblities that this period creates. Leave shorting and short-term market movements to the traders and the experts. This is about long-term investment, not short-term reaction.

 

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