They did it. The Brits voted yesterday to leave the European Union, driven, if the polls got it right, by fears of an immigrant invasion. Hadrian built his wall, Trump wants his, and the Brits decided to Brexit.
Global stock markets have fallen on the news and there’s surely more volatility to come. The past three months have actually seen a nice double-digit rise in markets worldwide but expect to give some of that back in the short run on fears of a negative impact on the U.K., on U.S. interests in Europe, and on the durability of the EU itself. Is it true that this development has negative ramifications? Yes. Will the more apocalyptic predictions now spilling forth come true? Almost assuredly not.
Europe, the U.K., the U.S. and the rest of the world will adapt to the new reality. As for the markets, they discount the future and will absorb and reflect the implications of Brexit relatively quickly. So best not to extrapolate what happens today or next week very far into the future.
In the end, broad diversification coupled with adequate cash and bond reserves will carry us through any short term dislocation we may observe as a result of Brexiting Brits.