After years of debate and speculation, last night’s vote confirmed that Brexit is actually happening and the United Kingdom is going to withdrawal from the European Union. The actual process of secession will take years, but when it comes to global markets the effects are going to be immediate.
1. Your portfolio is going to be a mess. The volatility that we’ve seen in the stock markets so far this year may have only been a warm-up for what’s going to happen next. Markets hate uncertainty, and there’s no clear path for a country to leave the European Union.
Stock futures fell more than 500 points late last night as the votes were counted. Once the markets open today, they could fall further. Even if you never realize those losses, seeing their impact on your portfolio is going to be painful.
2. Cheap mortgages are here to stay. Fed Chair Janet Yellen last week cited the pending Brexit vote as one reason the committee did not move to raise rates again. In a press conference following a Fed meeting, Yellen said that the Brexit’s “consequences for economic and financial conditions in global financial markets” could also factor into future decisions.
3. It just got super cheap to visit London. Economists are debating the long-term outlook for the pound, but in the near-term, the currency is going to be worth less than it’s been in decades. While votes were still being counted on Thursday night, the pound fell to a 31-year low.