Today we bring you a special edition of Inside the Economy with SH&J. As many are now aware, last Friday, 52% of voters elected for the United Kingdom to leave the European Union after a 43 year partnership. While it is not a legally binding referendum, the UK will begin a 2 year clock negotiating the terms of their exit. As a result of the vote, the global markets fell approximately 12% and the U.S. markets fell around 5%.

The jury will be deliberating this unprecedented event for several months or longer but one thing is for sure, markets hate uncertainty and increased volatility is expected over the short term. Although we have been assessing the investment ramifications of a Brexit for some time (knowing that the polls showed the vote would be very close), we don’t necessarily feel it will have any significant impact on the U.S. economy. The correction of the U.S. markets in particular over the past two days, in our opinion, is primarily based on fear of change and has little to do with U.S. economic reality. The same cannot be said for England.

Additionally, our investment process is designed to minimize the financial effects of singular headline events such as this, and we see no reason to make any major changes to the asset allocation of diversified portfolios at this time. We will be reevaluating our international investments to make sure they are properly positioned.

Our own Independence Day celebrations will occur next week and perhaps by the time the fireworks are over, the world markets will be a little calmer although the repercussions of this historic vote will probably have as long lasting an effect as ours did in 1776-only this time “The British are leaving, The British are leaving”.

To hear more on the Brexit, please tune into a special edition of “Inside the Economy with SH&J” below: