A few weeks ago asked a Brit I know about how Brexit would affect their investments. The terse, uncomprehending reply: "What's for breakfast?"
It seems many voters, based on Google trends data, performed their searches on "what is the EU" after the vote. I'm not making fun of Brits; the current U.S. electoral season Trumps the action overseas (and the play on words was not a partisan jab - the hintin's also about Clinton). Rather, I am pointing out (belatedly, I acknowledge) that I thought the referendum would turn out as it did (in favor of Leave) and therefore thought it quite insane that the "smart money" was betting the other way.
I don't mean to imply that I am somehow the smart money. Hardly. I don't actively trade and, in fact, I tend to think that making predictions is a fool's errand. But in this case my thinking that Leave would win was not an act of clever tea-reading so much as simpleminded reading of the writing on the wall. That writing says, in the words of the wise King Solomon (and some say it was The Byrds), that "for everything there is a season…a time to plant and a time to uproot what was planted."
Whether you think it good, bad or indifferent, the EU was planted, but its time is up. That, it seems to me, is simply today's zeitgeist. For that reason, Brexit is just a start but it doesn't end there. If the stereotypically sensible and gradualist British see fit to uproot, then no one should be surprised to see the Scots, Irish, Continental Europeans, or Americans act similarly. It's just the temper of the times, and adapting one's investing accordingly should seemingly be a priority.
Under the circumstances, how do you think people should invest today? (Please exclude answers involving cans of beans and stacks of ammo.)
Meanwhile, in today's news and views:
- ETFGuide offers an approach to achieve "high immediate income" by selling out-of-the-money put and call options on ETFs.
- And David Pinsen looks at how buying puts on SPY worked on post-Brexit Saturday.
- Erik Conley looks at market history and concludes that post-Brexit trading does not foretell a bad year ahead for the stock market.
- Martin Lowy's read on the situation is to concentrate on investing in the U.S. until such time as bargains materialize in Europe.
- Robo-advisor Wealthfront's recommended course of action in the fact of Brexit: do "nothing."
- UBS global chief investment officer Mark Haefele on what we've not learned post-Brexit, and strategy going forward.
- My colleague Robyn Conti has had a winning year building a dividends and income community on SA, all while serving as an inspiration to countless, loyal readers. Way to go!
- Roger Nusbaum of AdvisorShares notes a burgeoning "Regrexit" movement already collected 1.5 million signatures by Saturday.
- John Lohr suggests 12 steps advisors should employ in times of investor uncertainty.