Brexit

Brexit

I’m sure you’ve heard by now that last Thursday the citizens of the United Kingdom voted to leave the European Union (52% voted to leave, 48% voted to stay). The European Union (EU) is a political and economic partnership of 28 countries, mainly in Europe. The EU was formed after World War II to facilitate peace and free trade throughout the region, but many of the countries involved were accepted into the EU much later – even as late as 2013 in the case of Croatia. The popular nickname “Brexit” was derived from a combination of “Britain” and “Exit.” The UK’s withdrawal from the EU will not happen overnight, but could take up to two years to negotiate. No one knows what the economic impact on Britain, Europe, or the rest of the world will be. Some predict this is a recipe for global recession, and others claim it’s the best global economic news we’ve heard in a while. In the meantime, it’s hard to ignore headlines about the impact on the markets, such as the following: CNBC: Dow closes down 600 after Brexit surprise; financials post worst day since 2011 USA Today: US stocks hammered as Brexit shock rocks markets New York Times: Turbulence and uncertainty for the market after Brexit It’s true, that Friday and so far today have been bad days for the stock market, both in the USA and abroad. The Dow Jones and S&P 500 indexes were down over 3%on Friday. So what does this mean for investors? Some reporters, politicians, and economists would have us believe it’s time to run for the hills...