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5 reasons not to worry about Brexit

Brexit? Don't worry!
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Brexit? Don't worry! | Alex Segre/Shutterstock.com

Brexit? Don't worry!

When the United Kingdom surprisingly voted in June 2016 to leave the European Union, there was immediate confusion overall and volatility in the global market. But things calmed down quickly.

Now that the U.K. is set to begin the official process of splitting from the EU, we look at five reasons not to let Brexit and any economic fallout keep you up at night.

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You don't have a crystal ball | Charlie Bard/Shutterstock.com

You don't have a crystal ball

Before June 23, 2016, very few predicted the Brexit referendum would pass. The stunning result led to an immediate slide in the market, with the Dow Jones alone skidding more than 600 points. Then the markets recovered. By the end of June, everything was back to more or less normal.

Even if you could've correctly guessed that Brexit would happen, chances are slim that you'd have been able to predict the movements of the S&P 500 and London's FTSE, which dipped and then hit record highs.

There's no point – right now, anyway – in bracing for a bad outcome, says Raghu Suryanarayanan, a London-based economist and the executive director at MSCI, an index company that provides investment decision analysis.


Not a big-deal trade partner for U.S. | 360b/Shutterstock.com

Not a big-deal trade partner for U.S.

The U.K. will have to renegotiate its trade deals with European countries, and it's anyone's guess how these negotiations will go.

Germany, for example, could be a tough negotiator, says Tom Clift, chief investment strategist of Envestnet in Boston.

"(Germany) can make an example of them and make it as difficult as possible," he says.

But this doesn't really affect the United States.

The U.S. doesn't do a lot of trades with the U.K. For instance, the United States' total Chinese imports for 2016, according to the Census Bureau, hit $463 billion. From the U.K., our imports totaled just $54 billion.


It could be good for your wallet | August_0802/Shutterstock.com

It could be good for your wallet

The United States could see cheaper imported goods from the U.K., if the value of the British pound, which in October 2016 fell to a 31-year low against the dollar, weakens even more.

Luxury goods may or may not drop in price, but that lower pound makes a Burberry jacket or a Ted Baker handbag a little more affordable. 

Your dream trip to London or the Lake District gets easier, too. Here's more on how Brexit will affect your travel.


Spending could boost U.K. economy | mikecphoto/Shutterstock.com

Spending could boost U.K. economy

After the Brexit vote, people reached into their wallets and spending increased.

"Half the (U.K.) was happy with result and was celebrating," says Katrina Lamb, head of investment strategy and research for MV Financial in Bethesda, Maryland.

Consumer spending drove a 0.4 percent growth in the services sector in the month after the vote, according to the U.K.'s Office for National Statistics.


A solid portfolio can withstand shocks | g-stockstudio/Shutterstock.com

A solid portfolio can withstand shocks

The standard idea from investing experts still holds true: Keep a well-diversified portfolio.

And don't try to predict how events like Brexit will impact your investments.

"It's a really bad idea to try to outguess any of these single events," Lamb says.

CARD SEARCH: Heading to the U.K. soon? Grab a credit card that charges no foreign transaction fees.

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Here comes Brexit! It's the beginning of the end of U.K.'s relationship with the European Union. What does that mean for you?
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