Yesterday it seemed clear, polls, betting websites, global stock markets and currency markets all indicating that we would remain within the European Union.
However in a dramatic night’s compulsive viewing we saw a vote to leave win by a margin of 52%-48%.
So we have voted to leave and the world’s stock markets and currency markets immediately reacted, seeing billions wiped off the price of shares, the pound at a 31 year low against the dollar and strong rumours that we would lose our AAA credit rating.
However following the address from Mark Carney some calm has appeared to return from the initial chaos.
We anticipate that The Bank of England will stand by the necessary contingency plans they advised they had, and have confirmed this morning they will implement. The market will require liquidity and this may mean Interest Rates cuts and possibly even the re-emergence of Quantitative Easing.
Alternatively a rise in inflation may see a quicker than expected rise in interest rates.
The only certainty is uncertainty.
The majority of our investments are designed to be diversified. Whilst equities have been sold off massively, other asset classes will have rallied.
Should exports become cheaper and imports more expensive in this environment, then markets will pick over the details of this and the winners will emerge.
The media will be full of scaremongering for weeks to come. Many commentators will say rash and unhelpful things. The stock market has already fallen and it does not feel good. However, the losses are only crystallised if you sell.
Do not panic is our advice, markets have always recovered, even though these losses could be described as self induced they will behave as they always have done before.
We believe in time in the market rather than timing the market.
Ian, Martin and Will.