If there is a day that has the cross on it, that is none other than next June 23, when the referendum will be held to say if England leaves the European Union (EU), with the dreaded Brexit. And that you will have broad repercussions, not only political and social, but also economic. Where your interests as a small and medium investor will be affected equally. From what British citizens decide, it may make you earn or lose a lot of money in the financial markets, both in equities and fixed income.
The possible exit of the United Kingdom from the European Union would occur in a process known in the media as Brexit. Its significance will be very important for all Europeans, and where many interests come into play on the part of economic agents, which you should take into account in the coming weeks to prepare your investment portfolio. Not in vain, It would be highly advisable that you already take this factor into account when making it.
From the result that the question of this referendum finally has: Do you think the UK should continue to be a member of the European Union?, the financial markets will go one way or the other. And without a doubt that you yourself will be involved in its evolution, whatever the result. In any case, the latest polls published by the island's media give supporters of European integration a slight advantage. And as is normal, it is being very welcomed by the European equity markets, which fear Brexit.
Will the decision really affect you?
The departure of the United Kingdom from the European Union (Brexit) would have a very important cost for its citizens, according to a report prepared by the Organization for Economic Cooperation and Development (OECD), which shows that each British leaving this economic space would mean around 2.200 pounds (2.800 euros). But what about the other inhabitants of the old continent?
Much of the retail investors think that the effects of this electoral consultation Your pockets won't notice it, and if so, in a controlled way and with very limited consequences. At least in the short term it won't be this way, and Stock markets can develop very volatile movements, which even affect the profitability of open positions on the stock market. More than many intuit, as you can see in this article.
The reason is mainly due to the strong connection between the economies of the old continent. The dependence on the economy means that this decision has effects, at least among investors, depending on the result of the popular verdict that will take place in the coming weeks. And that it will be convenient for you to know its effects.
GB Brexit
If this were the decision of the English in the next referendum, the repercussions would be more than remarkable after the summer. Predictably, where it would be most noticeable would be in the European equity markets, which would have significant falls in all their indices. And with many possibilities to return to the lows that were played at the beginning of this year.
Faced with this scenario, there would be no choice but to abandon investments in the stock market, even with handicaps as a strategy to protect your savings. At least for a few months, where very virulent movements could be generated, which in no way will benefit your interests as a small investor. And of course, without taking positions in the stock markets, at least until the equity markets settle down.
That is when the question arises as to what you have to do in this new scenario that may unfold. Well, you will have other options to make the savings profitable, although from different approaches, which can be very interesting if you anticipate events.
Your investment strategy before Brexit would be based on opt for the values ​​that they exercise as a refuge. And first you would have the fixed income of Germany and the United States through their bonds. You will be able to achieve high profitability in these financial products, since surely the monetary flow of large investors is directed to these financial assets in a forceful way. Not surprisingly, it would be the first priority to defend your interests.
You cannot forget either the refuge value par excellence. It is none other than gold, and it could constitute an excellent investment in a scenario like the one proposed by the English referendum. Despite everything, the evolution of the gold metal is being fully satisfactory for investors this year, revaluing around 30%, given the certain instability of the markets and the international economy.
In a third step, you could also consider certain raw materials that are recovering levels in their prices. And between them, the oil that is on the way to reaching the important barrier of 50 dollars a barrel. Not surprisingly, during the last sessions it has shown a revaluation of more than 20%. And there are not a few financial analysts who recommend taking positions in this financial asset. Since the evolution of its price will be completely the result of the popular consultation in Great Britain.
All these investment tips can be applied to investment funds that maintain these bets investors. In a more suitable way to protect savings, since you can combine it with other financial assets through greater investment diversification. It will precisely be a strategy that you should use in this situation that can be developed from now on.
Everything is the same in England
The other possibility is that the result of the ballot box is that citizens want to maintain the islands' relationship with the European Union. The effects will be less important, and may not even significantly affect the financial markets, since they would be discounting it with the current prices of the companies.
If this is the popular decision, it is foreseeable that it will be greeted positively by the equity marketsEven large revaluations in company prices can be achieved. However, it would have a very limited effect, covering only a few trading sessions, but not months. And where the banking sector would be the main beneficiary of these generalized increases.
Could you take positions in the stock market to take advantage of these movements, even from really aggressive operations to optimize the news. It is not that you managed to be a millionaire overnight, but surely they would have a high probability of paying for your next summer vacation, or at least part of it. Both from the national stock markets, and from other European ones. Although it would be the English who would rise the most in this situation.
Also English fixed income will be able to make these movements profitable, and become another of the alternatives you have to optimize savings with greater success. Although the remaining products derived from the European public debt would not be left behind in their evolution in the financial markets. In any case, this referendum may be the perfect excuse for you to update your current investment portfolio, and modify it depending on the new scenario that may arise.
In any case, great news is not to be expected if Great Britain continues within the EU, in terms of the assets where you can shelter the money. If anything, in a very specific way and without great possibilities of continuation, beyond Brexit. There are other problems, which undoubtedly affect the markets and are still there, and among them the slowdown of the economy in the old continent.
7 tips for taking action
The best strategy you can develop in the face of Brexit is to act with some caution in your movements, and you must preserve the savings above other considerations. These are not times to obtain large capital gains, but to maintain what has been achieved so far. You can promote it from a series of recommendations that can be very useful at this time.
- Do not try to carry out very aggressive operations these days in the markets. It will be better if the questions raised by this popular consultation are clarified. And there will be times later for you to opt for equities, or other financial assets.
- It will be the most ideal time to perform adjustments in your investment portfolio, either in your positions on the stock market, or through incorporated investment funds. Surely you have to make more than one change to adapt them to the reality of events.
- If there are situations where you have to opting for defensive purchases, without a doubt, the current one is one of them. Not surprisingly, you will be able to find more than one product that perfectly meets these characteristics, and that will help you to make the wealth more profitable.
- Faced with the proximity of the next vacation, it may be time for you to take a break from your investments, and wait for the scene to clear up as the weeks go by. You will certainly come back with more strength to develop your investments.
- He thinks that at any time the savings can be made profitable, and business opportunities are always present, even in the most unfavorable scenarios. You will only have to find what you are looking for.
- You can anticipate the result of the referendum to try to make the movements profitable more effectively, and apply that old aphorism that applies both in the stock market "buy with the rumor and sell with the news."
- Do not try to earn in your investments what you have not done during the year, since it is not the most propitious time to execute this aggressive strategy. You will have greater opportunities later, without a doubt.