Portafina's response to Brexit
Our thoughts on today's outcome
The United Kingdom has decided to exit the European Union, with a slim majority for the Leave campaign. In doing so, it becomes the first member state to leave the EU, and both the stock markets and the pound dropped as an initial response.
Jamie Smith-Thompson, managing director of Portafina, gives his thoughts on the outcome: “My first reaction this morning was shock. While I always thought the outcome would be close, I expected Remain to edge it. There will be a period of uncertainty and volatility based around securing trade agreements with the EU. My personal view is that the EU will still want to do business with us, but that could take a long time even if it’s not too difficult. That, again, could mean volatility in the meantime. As the Leave campaign was always keen to point out, we may also have opportunities to form our own trade agreements with economies growing a lot faster than the EU’s. No one knows what that will look like yet, but there could be opportunities nonetheless.
The key thing to remember is that it is incredibly difficult to time the market. Our philosophy is to buy, hold and ride out short-term fluctuations. If ever there was a good example of a short-term fluctuation, we have seen it today. The markets had dropped off on opening and within a few hours had already grown 2 or 3%. It’s important to bear in mind that the volatility we have seen was expected, and the markets have been lower even recently. So although we don’t know how long it will continue or what our future holds, now seems a good time to practice the famous British adage: keep calm and carry on.”
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