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Schwab's Brexit thoughts
Old 06-25-2016, 04:57 AM   #1
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Schwab's Brexit thoughts

Got this email this morning. Good advice, and some nice comparisons to previous similar market drops:

After the Brexit Vote: What Lies Ahead for Markets?
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Old 06-25-2016, 06:09 AM   #2
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What should investors do?

Short-term focused traders should be prepared for further stock market declines over the next three to six months, similar to past shocks. We continue to believe volatility will remain a major characteristic of markets in 2016. However, longer-term investors may want to maintain their diversified asset allocations intended to weather volatility on the way to longer-term goals.
Schwab articles are pretty good. I'll stick with our current approach, which is classified as moderate.
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Old 06-25-2016, 08:32 AM   #3
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It looks like I'm screwed with no upside in the next few months. Probably time to go from 60/40 to 40/60.
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Old 06-25-2016, 08:35 AM   #4
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Probably time to go from 60/40 to 40/60.
Wasn't Thursday the time to do that?
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Old 06-25-2016, 08:56 AM   #5
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This is temporary. You might have said we are over valued, regardless of any Brexit.

Nothing will change for a few years, if ever. If it does change, it will not impact what currency the Brits use. It will go back to the way it was before. Did the EU even really change things for the better? I suspect that in many ways it is worse.

I will keep buying. Slightly less after I no longer have a paycheck, but still buying for a few more years to build up more dividends.
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Old 06-25-2016, 09:11 AM   #6
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It looks like I'm screwed with no upside in the next few months. Probably time to go from 60/40 to 40/60.
Your time horizon is the next few months? You would change your portfolio that much just because the market may not do anything for the next few months? Are you a trader or an investor?
I hope it goes down another 10% so I can buy more.
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Old 06-25-2016, 11:05 AM   #7
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Are you a trader or an investor?
What kind of question is that? I thought I had the most-viewed newsletter thread on this forum that defined me. I must work harder on that.
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Old 06-25-2016, 11:19 AM   #8
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Schwab articles are pretty good. I'll stick with our current approach, which is classified as moderate.
Agreed. Most of my investments are for legacy so 1-2 yrs or months can be buying opportunities. I can live well enough off pension + dividends until SSA kicks in
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Old 06-25-2016, 06:59 PM   #9
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Hopefully, one's portfolio is designed so that one piece of bad news from a foreign country won't wreak havoc with one's retirement plans.

My guess is that the UK along with remaining EU countries will 'muddle through'. In fact, despite the talk of other countries immediately following the UK's path, I think many EU critics will use this as an opportunity to wait and see what happens with the the UK pullout. Let them be on the bleeding edge for a few years.
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Old 06-26-2016, 04:01 AM   #10
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Originally Posted by Chuckanut View Post
Hopefully, one's portfolio is designed so that one piece of bad news from a foreign country won't wreak havoc with one's retirement plans.

My guess is that the UK along with remaining EU countries will 'muddle through'. In fact, despite the talk of other countries immediately following the UK's path, I think many EU critics will use this as an opportunity to wait and see what happens with the the UK pullout. Let them be on the bleeding edge for a few years.
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Old 06-26-2016, 05:24 AM   #11
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Time to put some of the sidelined cash back into the market.
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Old 06-26-2016, 06:30 AM   #12
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Wasn't Thursday the time to do that?
That's the problem with this market stuff: It was always a better time to do "that" yesterday.
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Old 06-26-2016, 06:44 AM   #13
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That's the problem with this market stuff: It was always a better time to do "that" yesterday.
I was going to say that, but then I thought I'd wait until tomorrow.
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Old 06-26-2016, 06:58 AM   #14
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That's the problem with this market stuff: It was always a better time to do "that" yesterday.
Yep!
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My Brexit thoughts
Old 06-26-2016, 08:04 AM   #15
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My Brexit thoughts

Continuing personal thoughts and observations on The UK exit from the EU.

Leave 52%.. Stay 48%

Turnout 33 million voters (US 2012 133Million)
66% of eligible voters (US 2012 62%)

Word Cloud for Leave... top Score "Immigration"
Word Cloud for Stay... top score "Economy"

Older Voters "Stay"
Younger Voters "Leave"

Current "revote" signatures... No legal action supported. 3 Million signatures to overturn results ? Unlikely

Voter Breakdown:
EU referendum: The result in maps and charts - BBC News

Wiki explanation of UK Parliament:
https://en.wikipedia.org/wiki/Parlia...United_Kingdom
Conservative - David Cameron (resigned)
Labour - Jeremy Corbyn (current support in question)

Other parties (outlined by Wiki) left/right/center leaning:
https://en.wikipedia.org/wiki/List_o...itical_Parties

Central Banks...No mandate for economic support, but historically likely. Short term stabilizing results, but longer term questionable. Could cause longer recovery period.

Typical investment management involves company ratings. The EU took much of the comparative dollar value out of the equation. Going back to individual country dollar values may complicate financial advice.

Global equities markets had a $2 Trillion Market Cap Drop. The health of the EU Country economies will come into play as markets rebalance. Internationally, the same uncertainty may delay and a return to stability. Brexit adds $380 Billion to the Global Bond Yield worries.

Negotiations UK/EU:
Look to be fiery for a few days. Balance of trade, likely to be the heart of the ongoing instability in the short term. All trade agreements will be have to be renegotiated. UK should have the edge based on the import/export ratio.

The lingering question is what, if anything will happen in the matter of immigration, jobs, and the concentration of wealth that triggered the initial vote. Similar political concerns exist, not only in the EU, but worldwide. But we won't go there.
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Old 06-26-2016, 08:35 AM   #16
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Actually, imoldernu, it was the young voters who voted to Remain, while older voters voted to Leave. Unfortunately, many young people didn't vote.
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Old 06-26-2016, 08:42 AM   #17
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I think a better response is that those over 45 years of age tended to vote in favor of leaving the EU entirely.

This page which Imoldernu quoted has plenty of graphs:
EU referendum: The result in maps and charts - BBC News

Turnout was low in areas with younger people. I guess they learned something from the referendum.
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Old 06-26-2016, 09:02 AM   #18
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Actually, imoldernu, it was the young voters who voted to Remain, while older voters voted to Leave. Unfortunately, many young people didn't vote.
Sticky fingers again... upside down You are definitely right.. I do know better...

Interesting that of the young eligibles only 19% did vote.
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Old 06-26-2016, 09:11 AM   #19
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Sticky fingers again... upside down You are definitely right.. I do know better...

Interesting that of the young eligibles only 19% did vote.
Yes, and I just ragged on my daughter and her boyfriend yesterday about that topic. They (the younger folks) do tend to have strong opinions, but then can't be bothered to actually go out and vote - to frame it in THEIR lingo: "well, duh!'
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Old 06-26-2016, 12:56 PM   #20
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Yes, and I just ragged on my daughter and her boyfriend yesterday about that topic. They (the younger folks) do tend to have strong opinions, but then can't be bothered to actually go out and vote - to frame it in THEIR lingo: "well, duh!'
They'll post angry pictures on snapchat though. That'll show them politicians.
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