Whether Britain will remain within the European Union or not, its a done deal. The British people have spoken through the past referendum. In the previous week all stock markets has responded badly. The British pound has lost its 31 year gains, global share prices has fallen, not yet fully recovered. But what’s the hype about Brexit?
The European Community was established in 1957, by member countries like, Belgium, France, Italy, Luxembourg, Netherlands and West Germany in Rome, to create European Economic institution, commonly known as ECC. Britain first applied for membership in 1961, but it was rejected by member countries. In 1973 it applied again and was admitted.
The call by British people to withdraw membership was started during 1980’s. Therefore it’s not a new thing. Those who favor brexit, advocate that it, its economic interest and growth will be better served out of the institution, whereas those who are against it maintain that, the country will be economically better off the Union.
Why Stock Markets reacted the way they did?
UK is one of the biggest world economies. The Market reaction is mixed. The pound has lost 10% of its value, this means that the market reacted negatively towards the move. However, the euro has also suffered some serious losses. In a nutshell both sides has lost their economic gains. What’s the reason for both, the answer lies in economic certainty. Investors big and small are not sure whether their investments in both institutions will be safe in the near future.
What it means as individual investor
There’re individuals who have established part time or full time businesses and later invested their income in stock market (shares, unit trust etc), both in EU and UK companies. These individuals are also uncertain as to what will happen to their investments portfolio. Some have reacted by selling them, others are not sure what to do.
Word of warning
Financial markets do not move in a straight line. Remember 2009, recession phenomenon, when it landed, investors started to panic and move their investments around. But when the dust settled they stayed calm.
Brexit, is another economic phenomenon that happens from time to time. It’s not a hype, but one of those situations that continuously shake the world economies. You as an individual investor must not be easily shaken, these things will always come and ago like flu virus. Money can only be made if the investor is focused and unshaken. Its a long term commitment. Your investment will yield phenomenal growth if you leave it untouched for 5, 10, or 20 years period.
One of the winning formula for investment is to stay calm wait for longer period for you money to grow. At the same token build your business either part time or full time. Then invest your profit in for long term period. That’s what legend investors do. They don’t worry about short term financial market fluctuation, because they don’t last for ever. UK is one of the stable world economies, it will soon take its center stage in no time. Brexit phenomenon will later become something of the past. Brexit is not a hype, stay calm for now and watch for the next move.