As we move towards 2019 and the UK’s separation from the European Union, everyone is pondering the potential cost of Brexit. From politicians and economists to retailers and consumers, money is a major talking point.
Although the true impact won’t be known until long after the UK says bon voyage, the most recent estimates suggest it could be costing £500 million per week. While such estimates are, in essence, educated guesses, the undeniable fact is that it will have some sort of effect at home and across Europe.
For better or for worse, Brexit will change the economies of Europe. For those with an eye on the financial markets, that means a period of change is coming.
Use the internet to your advantage
As noted by City AM columnist and analyst at Schroders Simon Alder, opinions are split on which stocks to buy post-Brexit. For experienced investors, instability is a golden opportunity to make money. However, for the novice, knowing which side of the coin to stake your money on can be tricky.
Fortunately, in today’s online world, there are tools to help. Indeed, by trading via an online broker, investors are given access to a multitude of signals and insights. What’s more, online trading sites allow users to buy stocks and shares in hundreds of industries. Using a reputable provider, even low stakes traders can invest in 19,000+ stocks across 36 exchanges.
In times of uncertainty, these provisions are crucial. For Alder, there is certainly a case for buying British as stocks prices are likely to be low after March 29, 2019. Indeed, as he notes, many see Britain as one of the least desirable emerging markets thanks to Brexit. However, there are some that believe this may not be the case.
With the right deal and historical partnerships remaining strong (e.g. with the US and with Australia), Britain could become one of the stronger emerging markets. If that proves to be the case, stock prices would be high and, therefore, not as desirable. This is where access to dozens of emerging markets becomes useful.
Be prepared for anything
In situations where the pendulum could swing either way, flexibility is crucial. Those working on the trading floor known this, but it’s something newbies often forget. Rather than using all the resources at their disposal, an inexperienced trader will pick and side and stick to it regardless. By trading online, that doesn’t have to be the case.
To say “buy XX stocks” after Brexit is easy. However, supporting that assumption isn’t. Anyone looking to play the stock market pre- and post-Brexit needs to remain flexible and not get sucked into one person’s way of thinking. Indeed, you only need to look at the contrasting calculations on how much the political break will cost to see you shouldn’t follow one perspective.
All we really know is that Brexit will change the value of certain stocks and shares. However, only the brave will admit they don’t know which way. For those looking to take advantage of these changes, the only plan you should have is to not have a plan and simply roll with the punches as they come.