Brexit? Regrexit!

JULY 06, 2016
Future Proof, MD


It has been two weeks since the beast named "Brexit" took a bite out of the world markets. If you haven't already, check out my thoughts in this previous post BREXIT - Run for the Hills? How have your portfolios fared? Is your crystal ball getting any clearer? Have you seen the new trending hashtags #REGREXIT or #BREGRET? Let's review how my predictions have fared.


For Your Practice:

I stand by my claim that if you import any medicines or products from the UK, you're about to get a nice discount. In fact, you probably already saw a benefit if you had done any business within the last two weeks.


For Your Leisure:

Have you planned your British vacation yet? Better get on it! It could get crowded soon with Canadians eying the UK for their next cheap vacation. This is fueled by the fact that the pound is taking a pounding (pun intended). One British Pound was worth 1.30 US Dollars this morning, I actually don't remember the time it has been lower than that. Which makes sense, since the last time a Pound was worth less than that was before I was born.


For Your Income:

When I predicted that your earned income would not be affected by Brexit, I forgot a selected group of people.  If you are an expat living/working in the UK and getting paid with American Dollars, congratulations on your recent raise! (Doubt there are many physicians who fall into this category).


For Your Investments/Retirement:

As expected, the global markets took a bit of a roller coaster ride in the last 2 weeks.  Luckily for us, the S&P 500 seem to have handled the shock quite well. Surprisingly, our British colleagues seem to have handled it even better! Take a look.  
 


So the real question seems to be -- did you get in on the dip? It seems like maybe several of my physician colleagues did. The previous post was featured in Doximity's DocNews newsletter and here are some of the comments:

Posted Jun 25 - It's affecting me pretty well. I'm buying up some very cheap stocks on clearance.

Posted Jul 2 - It's affected me very well too. Bought a triple leveraged oil ETF and can pay off a semester of med school loans with the gains. Maybe more going forward.

Posted Jul 3 - Tempest in a teapot. This is no Lehman moment. Buy and hold!

 

But There Were Surprises:

Ok, so the Brexit vote came as a shock to the world markets, which makes sense as nobody REALLY expected the Brits to shoot their own economy in the foot. However, what is surprising is that there is a very good chance those who voted LEAVE didn't understand what they were voting for -- the Brits were frantically searching for the answers to the question "What is the EU?" AFTER the vote! In addition, there is evidence that a good number would change their vote to STAY if given the opportunity.  No wonder #BREGRET and #REGREXIT have become popular hashtags. 


Bottom Line

Two weeks after the Brexit vote, we still have more questions than answers. How is the UK going to negotiate its departure from the EU, especially regarding the free movement of goods and labor? Is there going to be another referendum? Will any other country leave the EU? Here's an even scarier question -- if the British could vote to leave the EU based on fear and misinformation, what does that mean for the upcoming 2016 US presidential election?  

But in the short term at least, justified or not, the economic damage appears contained.

Thoughts and comments? You can reach me at http://futureproofmd.com/



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