Hey there! Sign in to have your say on this topicNew here? Join for free to post

7 reasons why you shouldn't worry about the markets post-Brexit

Announcements Posted on
Why bother with a post grad? Are they even worth it? Have your say! 26-10-2016
    • Thread Starter

    1. This too will pass. Markets are panicking? Markets often panic. They’ve panicked a lot worse than this many other times. And each time in the past they recovered and then some. Anyone who bought stocks after Lehman Brothers has made a mint.

    2. This is much smaller a deal than everyone is pretending. The entire European Union accounts for 17% of real world economic output — adjusted for purchasing power — according to the International Monetary Fund. That’s down from 24% at the start of the millennium.

    3. This is even smaller than that. The British and the Europeans are going to get together and do deals. Britain will almost certainly end up in a new, face-saving, “we’re not really in the European Union even though it looks like it” version of the EU. Everyone has an incentive to do a deal. No one has an incentive not to. And those Europeans who helped cause this by talking smack, like European Commission President Jean Claude Juncker, have now been sent to bed without dessert by their bosses.

    4. People are trying to panic you. At times like this, market commentators know absolutely nothing and pretend they know everything. My eyes have already glazed over at all the ridiculous prognostications about the future I’ve read in the hours since Britain voted for Brexit. Europe “will” do this. France “will” do that. Angela Merkel “will” do the other. It’s all horse manure. Ignore it.

    5. Investors can find value. The market plunge on Friday has left many stock markets looking inexpensive on long-term measures, especially in EuropeSXXP, -7.03% . The PX1, -8.04% , German DAX, -6.82% , Italian I945, -12.48% and Spanish IBEX, -12.35% markets look especially inexpensive, according to calculations provided by London-based investment strategist Joachim Klement of the CFA Institute Research Foundation. France trades at 12 times cyclically-adjusted earnings, he estimates: The historic average there is 20 times. Germany trades at 14 times (far below a cyclical average of 18 times). Italy’s on eight times (history: 20 times), and Spain on seven (history: 17). All four can be accessed by the iShares France, Germany, Italy and Spain exchange-traded funds.

    6. Those less active can still take advantage of the selloff to add to their holdings in international stock funds, which include all major European and Pacific equities, and emerging-market stock funds.

    7. Those buying stocks in a fire sale should, however, be prepared to feel really stupid before they feel really smart. You never catch the bottom and should never try. Prices may well get much cheaper before they turn around. The only sensible approach for an easy life is to buy little and often.
Write a reply…


Submit reply


Thanks for posting! You just need to create an account in order to submit the post
  1. this can't be left blank
    that username has been taken, please choose another Forgotten your password?
  2. this can't be left blank
    this email is already registered. Forgotten your password?
  3. this can't be left blank

    6 characters or longer with both numbers and letters is safer

  4. this can't be left empty
    your full birthday is required
  1. Oops, you need to agree to our Ts&Cs to register
  2. Slide to join now Processing…

Updated: June 25, 2016
TSR Support Team

We have a brilliant team of more than 60 Support Team members looking after discussions on The Student Room, helping to make it a fun, safe and useful place to hang out.

What were/are your predicted grades?
Useful resources

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.