#Brexit and your Financial Plan
Yes, a country leaving the EU is a historical and potentially once-in-a-lifetime event. The ripples from the Brexit will ripple across the globe. If you've been watching the news today you may have heard all kinds of news about major movements in the various stock markets around the globe. What does this mean for you and your financial plan? CBS News sent a camera crew to my home last night to get my thoughts on this topic and I thought I'd share a few of them here with you.
The last time CBS rushed a camera crew to my home to capture some sage financial advice, the market was down around 600 when they called but was just down by 300 when I hit the air. This is similarly big news, and also I expect to be similarly short-lived.
Couple things to think about:
#BREXIT is big news for the TV folks, but really a non-issue in the long term for you. Ok maybe for you if you are booking a trip to the UK - the British LB value has dropped precipitously versus the dollar which may make a trip to London more cost effective than normal. Other than that this really may not matter much to the average American in the long run. DON'T FREAK OUT!
It's important to remember that your financial plan and personal investment choices should be based on your LIFE, GOAL, HOPES and DREAMS rather than a roller coaster ride constantly reacting to apocalyptic speculation. This time is not different, and any financial decisions you may make should be made with your long-term goals.
Trying to time the market is a fool's journey, no one can do it consistently. This is one of the biggest investing mistakes people attempt and make repeatedly, with little to no success. The goal is to buy low and sell high, but many people who attempt to time the market end up doing the opposite, buying HIGH and selling LOW. Put more simply they are losing money, and most likely paying more taxes and fees than they need to be.
"The Stock Market has a very efficient way of transferring wealth from impatient to the patient," as the sage of Omaha's Warren Buffett once said. This quote is quite pertinent on days like this when the markets promise to be volatile.
The main questions that CBS news posed in my appearance last night was, "With Brexit markets are expected to drop tomorrow what does this mean for people's 401(K)'s?" If you check the markets in the next few days you can expect the Brexit news to cause some volatility, just like every other speculative news, the world has not ended. Don't freak out and make big investing mistakes that can take you off the path to financial independence.
This news as promised has dominated today's news cycle, but it shouldn't dominate your important life and financial decisions. Personally, I always like to buy when the market dips, buy low sell high (or never), right?
Don't let the crazy voting in a far-away land cause you make to make crazy decisions here at home.
Here are two articles you might enjoy before the news and markets get crazy.
Until next time, stay calm, ignore speculation, and remember -- your money matters.
David Rae appeared in three news segment talking BREXIT with CBS and KCAL News.
DAVID RAE, CFP®, AIF® is a Los Angeles-based Wealth Manager with Trilogy Financial Services, a regular contributor to the Advocate Magazine, HuffPo Blogger and a financial adviser proudly serving friends of the LGBT community for over a decade. For more from David Rae check out his blog FinancialPlannerLA.com
Article Originally Published on the FinancialPlannerLA.com
Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered through Trilogy Capital, a Registered Investment Adviser. Trilogy Capital, Trilogy Financial and NPC are separate and unrelated companies. The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC.