Schwab's Brexit thoughts

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.
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Schwab articles are pretty good. I'll stick with our current approach, which is classified as moderate.
 
It looks like I'm screwed with no upside in the next few months. Probably time to go from 60/40 to 40/60.
 
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.
 
LOL! said:
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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Your time horizon is the next few months:confused:? 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.
 
Blueskies123 said:
Are you a trader or an investor?
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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.
 
target2019 said:
Schwab articles are pretty good. I'll stick with our current approach, which is classified as moderate.
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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 :)
 
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.
 
Chuckanut said:
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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+1
 
aja8888 said:
That's the problem with this market stuff: It was always a better time to do "that" yesterday. :facepalm:
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I was going to say that, but then I thought I'd wait until tomorrow. :)
 
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/Parliament_of_the_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_..._United_Kingdom#Register_of_Political_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.
 
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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Meadbh said:
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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Sticky fingers again... upside down :blush: You are definitely right.. I do know better...

Interesting that of the young eligibles only 19% did vote.
 
imoldernu said:
Sticky fingers again... upside down :blush: You are definitely right.. I do know better...

Interesting that of the young eligibles only 19% did vote.
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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!'
 
euro said:
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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They'll post angry pictures on snapchat though. That'll show them politicians.
 
LOL! said:
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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I moved my TSP from I/S to F-fund. Will hold it there until after the election, I guess. I told myself not to time the market and it appeared that the Brexit would be to "remain" two days prior, but the move did allow me to save a portion of the portfolio from the volatility.

Might move it back if I see a huge drop in the market (buying opportunity), but I've got to get out of this habit of timing the market that I periodically do. I won't need the money for a long time if ever thankfully.
 
Over the weekend, most of the financial news TV stations were geared to the international effects of the Brexit. Many of the financial gurus keyed their expectations for the individual country's markets, to the intrinsic value based on the outstanding debt.

This website covers the basics. The detailed columns are sortable by clicking on the headings.

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

While the current confusion about the future of world markets will likely take some time before stabilizing, the personal individual debt may give an indication of long term volatility. Just one more factor to consider as we look into that crystal ball.
 
Today, my 60/40 portfolio is back to -0.078% from where it was the day before the Brexit decision.
 
With my 40/60 portfolio, I am within a few bucks of where I was.

If the S&P closes up ( up about 18 right now) I should be to the plus side...
 
Drama is great for the media as it gives them something new to talk amount.

It's great for institutions because it causes activity... ie transaction fees.

Not sure how much it matters to me.

There's super low correlation between big historical events and major market moves I think?

Sent from my HTC One_M8 using Early Retirement Forum mobile app
 
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