We thought it would be a good time to touch base with the market turmoil surrounding Britain’s referendum vote on leaving the European Union. While the vote will probably be accepted by the Parliament in London, the referendum was non-binding and we still do not know what the final outcome may be. Most likely, this was a protest vote against the establishment and is similar to what is happening in the current U.S. election cycle.
In the end, we believe that these events will not result in a “Lehman moment”. The Dodd-Frank legislation has significantly fortified the capital held at U.S. and European banks since 2008. Further, central banks are prepared to provide liquidity funding. Investors should be careful to avoid reactions and decisions based on emotions. For more information, please watch the video interview with Liz Ann Sonders, Chief Investment Strategist at Schwab.
(Click here to view this video in its original content)