As the people of Britain have voted to leave the European Union the burning questions (and there are many) are yet to be answered. One thing is for sure, this clearly represents a very significant decision for the UK, but I fear it has much bigger and far-reaching implications for the future of Europe and our on-going relationship with our soon to be divorced cousins.
The initial shock of the vote certainly caused a monumental earthquake in terms of the value of Stirling, surprisingly though the UK FTSE 100 and the wider stock markets in the UK reflected what I’ve been preaching for months, were doing fine over here thank you very much. The UK economy has been slowly pulling ahead of our European cousins. It may not be a popular observation but George Osborne has done a remarkable job of steering us out of the 2007-2010 recession, I accept there has been pain involved with the austerity measures he has taken but the UK is undoubtedly much stronger now for his efforts.
So what challenges do we face?
Uncertainty is the major one; stock markets, foreign exchange dealers, Banks, Business owners, Entrepreneurs and anyone with a financial interest in the markets hate uncertainty. The most interesting fact is that uncertainty causes volatility; in these markets an astute fund manager can be worth his/her weight in gold! Opportunities to buy great companies stocks at knock down prices, the opportunity to inject capital into an enterprise that will capitalise in times like these. The whole prospect of this actually excites me, we have had 9 years of low interest rates, an almost stagnant economy, we have been working the margins to death to make mediocre profits, the fact that the Banks have been offering such pathetic returns to investors has almost bludgeoned savers into accepting long term poor returns.
Throughout these times we strongly urge investors to look through this period of uncertainty and focus on the medium to longer term, in my view the future might well be much better than some people are currently concerned about.
Now is a time for careful planning not frantic panicking.