Britain’s referendum on its EU membership is fast approaching. On June 23rd, Britain will go to the polls to decide whether it would like to remain in the European Union or not. At present, it’s difficult to tell which way the British public will vote, with many polls suggesting that both ‘In’ and ‘Out’ camps still stand a good chance of victory. A recent intervention by US President Barack Obama has helped the ‘In’ camp, but the result remains far from certain, with a number of both individuals and businesses worried about their investments. In this post, we take a look at how a potential Brexit could affect your investments.
Difficult to Accurately Predict Impacts
The issue with stating what will happen to investments in a post-Brexit Britain is difficult because nobody really knows what a post-Brexit Britain will look like. As such, there’s a great deal of sound and fury from both camps, with each accusing the other of trying to instill a ‘politics of fear’.
According to The Telegraph, The AA believe that fuel bills would rise by £500 per year, while Amber Rudd, the Energy Secretary, said that energy costs could soar. Elsewhere, analysts at Goldman Sachs have said sterling could collapse by as much as 20%, while stock markets are tipped to slide by up to 30%, which could hugely knock ISA and pensions investments.
Are these Predictions Overblown?
However, some believe that these projections are overblown hyperbole and the short-term damage caused by Britain leaving the EU will be minimal, and that’s if there’s even any at all.
Due to the fact that the UK stock market is dominated by large international companies, there may not be too much of a risk, as their performance isn’t linked to domestic issues. As with any time in the stocks and shares market, there are always risks.
However, Brexit is certainly not the greatest risk in the markets at present, and the state of the Chinese economy, US interest rates and oil-price movements are far more significant factors.
As a result, although we may see some short-term turmoil in the case of a Brexit, it’s likely to be less influential than people would currently have you believe. So, although your investments may be affected, by diversifying your investment portfolio, you should be able to circumnavigate much of it. Try looking at stocks and shares ISAs as well as investing in safe haven assets such as gold to maximise your protection.
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