It’s been 115 days since the vote for Brexit occurred. Having previously blogged about my shock at the result and recommended a number of survival tips for the predicted storm I think now is a good time to see where we are almost 4 months from the day the nation delivered the mother of all protest votes.
So what do we now know…in a nutshell, little more than we did back then EXCEPT:
- Article 50 (initiation of the process of leaving the EU) will be triggered at the end of March next year. Cue decline in Sterling value following this announcement –clearly the markets don’t like the sound of this (it still hasn’t recovered).
- Immigration controls will take precedence over the Economy. Granted an ever so slight majority of the population voted for Brexit based on “taking control of our borders”, but will people be satisfied with closed borders if jobs disappear to mainland Europe??? Anyhow I digress.
What will Brexit look like?
There have been talks of “Hard Brexit”, “Soft Brexit”, “Brexit means Brexit” but we will just have to see what sort of Brexit we get. With my stocks percentage growth up in the double digits should I be celebrating??? The jury is still out, we will have to wait and see.
So back to navigating these unchartered waters these were my previous recommendations:
Step 1 – Set up an Emergency Fund
This still holds true. We should always have an Emergency Fund in place to deal with those unexpected costs. At least six months costs when starting out, but you could reduce this to three months once you’ve established a larger pool of funds. The key is that you are easily able to access the money in times of need and avoid the need for taking on debt. With the decline in Sterling you may want to avoid holding excessive amounts in cash in the event of further declines in its purchasing power.
Step 2 –Maintain a Diversified Portfolio
Even more important! With the uncertainty surrounding the UK (i.e. the question of whether access to the single market will be maintained), now is the time to make sure you don’t have all your eggs in one basket. Diversification is a way to manage risk; investing in a range of things across asset classes, geographical regions, industries etc so as to reduce volatility. The concept is that if one area of your portfolio went down it would be offset by gains in another area, thereby smoothing things out. At the moment we may be seeing gains, but there is nothing to say this couldn’t change as the details of Brexit are revealed If you haven’t already diversify, diversify, diversify!
Step 3 – Do your research before making BIG financial decisions
Predictions of a housing crash, job losses, company relocations and general economic instability appear to be the norm at present. Whilst those things may or may not happen (I don’t have a crystal ball), now is as important a time as any to do your research. Don’t be tempted to overstretch yourself and take on unnecessary debt.
Step 4 – Don’t Panic
Tempting as it may be when it seems like no one has an idea what’s going on! Panic won’t change things nor will it do you any good. What we can do is put things in place to mitigate the risk to ourselves. There are still so many moving parts it’s impossible to predict what we’ll be dealing with. So as we continue on this bumpy ride, let’s continue to cushion ourselves on the way and look out for opportunities!
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