United Kingdom voters chose to leave the European Union one month ago on June 23rd. Panic immediately spread across the world as people extrapolated this decision into what they expected to follow. Talking heads suggested this would cause a worldwide recession. SELL, SELL, SELL! Some investors actually followed this advice, as it caused the S&P 500 and international markets to fall by 8-11% over two days. United Kingdom stocks also quickly plummeted by double digits.
If markets around the world fell that quickly, many in the media would suggest even worse results one month later. However, cooler heads have prevailed, and virtually all of these markets are now trading higher than they were before the vote. The S&P 500 is almost 4% higher than the levels before the Brexit and the United Kingdom stocks are 7% higher.
The true implications of this unprecedented vote are still unknown, but this is just another example of panicked investors making an emotional decision to immediately react to the news. This is certainly not the last surprising event to take place this year, but we remind clients to stay the course and remained diversified.
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