The Importance of Financial Planning

The Effect of Brexit on Pensions & Investments

A few Clients have asked about the effect of the Brexit decision by the UK on Investments and Pensions. The main effect of such news would be on the Equities (shares) part of portfolios. The two main markets we use are the Standard & Poors 500, (the 500 largest companies in the US), and the FTSE100, (the 100 largest companies in the UK).

One week after the shock decision, the effect on these Markets has been negligible.

The best way to assess the effect is to compare the value of a €50,000 Euros investment in the first three weeks of June, to the value of that investment at the close of business on 1st July, one week on from the shock announcement. The value at 1st July would be €50,129, a slight gain. Similarly a €50,000 Euro investment in the Standard & Poors 500, in the same period would have  ended up yesterday at €50,799, again a slight gain.

When such events occur, you always have to bear in mind

  • The Media always exagerate bad news. They give much less coverage to good news, such as recovery from market shocks.
  • Markets always tend to over-react to bad news initially.
  • You always have to take into account exchange rates, as well as changes in the stock markets.

If you have any queries please call our office on 046 9240961
Aidan Wall QFA FLIA
Lifetime Financial Planning