Brexit Stock Market Crash-What Should Investors Do Now?

By in Economics, Investing, Video | 5 comments

Help-What Should I do About a Stock Market Crash?

I got an email this morning from one of my freelance investment writing clients to find out if I could help investors worried about their 401k accounts after the Brexit stock market crash. Yesterday, Britain voted to leave the European Union-Brexit. I whipped out an article and decided, that even though I’m somewhat uncomfortable with video, I had to let you know how not to panic. 

Investment markets tanked today and left many investors worried and uncertain how to proceed. 

Here’s what to do now, after the Brexit stock market crash.

Please share this video, as investors are their own worst enemies and frequently make stupid moves and flee after a market drop. That behavior will leave to sub-par investing results.

Stock Markets Typically Trend Upwards

I created this chart to show that in spite of big market declines, the overall trend of investment markets is upwards. Although no one knows the future for certain, it’s likely that the market will rebound from it’s lows and trend upwards again. The market declines below correspond with bad news. In spite of the fact that most stocks fall after a big U.S. or international news shock, in the past, the stock prices rebound. 

Brexit Stock Market Crash-What to do when investments fall

Investing Takeaway for Brexit Stock Market Crash

  1. Choose an asset allocation and stick with it.
  2. Don’t jump in and out of the markets. Your returns will suffer and you’ll have to be right twice-once selling and again buying in. 
  3. If your skittish about market volatility, hold greater percentages of bond funds and lesser amounts of stock funds.
  4. Don’t keep any money in the investment markets that you’ll need within the next 5 to 7 years.

Keep Calm and Don’t Panic When Markets Crash

    5 Comments

  1. What to do? STAY away from the Ponzi Scheme known as the stock market. eg I buy at 12.00 hoping someone, stupid enough, buys it at 20.00 later on… PONZI at work. DUH.
    Try triple (actually quadruple in some states) Municipal (Insured or Very Highly Rated) Bonds. Buy & Hold. The price (value) WILL fluctuate, but who cares when you hold them until maturity? You get all of your interest (TAX FREE) and the principle returned at maturity (unless you buy Zero-Coupon Bonds that just grow until maturity). PLAN AHEAD by buying bonds that mature when you will want the money. eg College or Retirement dates.

    Randy C Hamilton

    June 28, 2016

  2. Hi Randy, Sounds like you found a strategy that works for you. I do need to clarify that the stock market isn’t a ponzi scheme but comprised of shares of individuals companies.
    A current disadvantage of only investing in muni’s today is that the returns are quite low:
    A Rated Bond Yields> 2.0% – 2.65%
    AAA Rated Bond Yields > 1.50% – 2.20%
    As reported here https://www.fmsbonds.com/market-yields/
    I always appreciate your comments Randy!

    Barbara Friedberg

    June 28, 2016

  3. Short term thinking on your part.
    FMS site: GREAT! Super information and philosophy (buy & hold).
    So many people get screwed by the “stock market” dropping 50%, regularly (every 7 to 10 years), that I still call it a Ponzi Scheme. I could give you a forest of examples from my tax clients and coworkers. Plus paying up to 4 types of taxes on dividends and sales (IF you get a profit) wipes out most of the “gains.”
    Would you like to buy my Worlds of Wonder stock?
    ALSO: The lie of a 10% return compounded over time amounts to just that, a giant lie. They base it on reinvesting 100% of your dividends (of late, dividends are very low, which does not get factored in) and that means you have to pay all of the Income, state income, and intangibles taxes from OTHER MONEY.
    …Liars figure, as the last part of the old saying goes.

    Randy C Hamilton

    June 30, 2016

    • Unless you need your $ in a downturn (EVERY 7 to 10 yrs, minimum!). THEN you get to pay TAXES out the ears.
      “Historical” I debunked in the previous comment………..

      Randy C Hamilton

      July 7, 2016

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