Brexit: I’m Clueless So I’m Holding

In my lifetime, I’ve never seen anything like Brexit. No one has because I believe nothing like this has ever happened before. It was so unexpected and the ramifications are so unclear that investors have panicked to the tune of more than a $3 trillion worldwide loss in the financial markets.

I don’t understand most of it and clearly, no one really knows how things will develop. Will this be the catalyst that breaks up the EU? How many other countries, if any, will follow and break away? Is the Brexit vote reversible? Will this be the beginning of a very long bear market? Will that bear market be the worst we’ve ever seen? Should you sell everything? Should you just sell stocks that have exposure to the UK?

Honestly, I don’t even know what questions to ask and I don’t think I’m alone. 

Analysis Is All Over The Place

I get much of my financial news on Flipboard by subscribing to the Business and Finance sections. It pulls articles from all sorts of financial publications so it is a good place to go for all your stock market news. 

During the last five days, as you can imagine, there have been hundreds of articles about Brexit. It is the topic of the month and probably the year and there is no lack of reading material if you are interested in finding out what the journalists and “experts” are saying. 

And what the journalists and experts are saying shows that they don’t know what this all means either. For any opinion you might put forth or read, I’m confident that I can find the opposite side. I have read so many different opinions about Brexit and how this will affect Britain, Scotland, Europe, America, and Asia that I have come to the conclusion that no one really knows. 

Everyone is just guessing because this has never happened before and the story can turn and go in many different directions. 

When In Doubt, The Best Course Of Action With Stocks Is Usually To Do Nothing

I may be wrong and I may regret it later but as a long term investor, I’m doing nothing. I’m not intending on selling anything or buying anything because of Brexit. I just don’t know enough to know whether doing something is better than doing nothing. 

Investors have clearly panicked (maybe they are correct) and stock losses have been deep. But history shows that selling into a panic is not the right thing to do. In fact, many times buying stocks when everyone else is panicking has been the correct choice and the temptation is there now. But again, since Brexit is so unprecedented and so confusing, I don’t see myself buying any stocks unless the market goes down a lot more. 

2 Responses to “Brexit: I’m Clueless So I’m Holding”

  1. Ilias says:

    Hi Bruce,

    thank you for sharing your views with us. What happened to your plan of buying SPY every month? Did you change your view on the market?

    thanks in advance

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