Chief Investment Officer
Friday 06-24-2016 (12:00pm)
Markets around the world are responding sharply lower following the unexpected vote by the British to leave the European Union (EU) – frequently referred to as Brexit. We felt it important to share with you our preliminary thoughts on the developing situation.
- We have been preparing for this possible scenario. In many of our actively managed strategies we have raised the level of cash, reduced higher risk positions and added holdings that have the potential to be less impacted such as gold and puts for many of our clients who participate in our stock options programs. It should also be noted that our strategies in general have very little direct exposure to European equities.
- The outcome is confirmation of the fact that polling data seems to be less and less reliable. Something we will keep in mind as we move toward our elections in November.
- The process of the United Kingdom actually leaving the European Union will take approximately two years. After the initial shock is considered by the markets, there should be time for a clearer picture to emerge relative to the actual impact and the potential for an orderly exit remains.
- We expect this event to be more like the Chinese devaluation and Greek exit scares rather than a severe turning point for the global economy.
- Events such as this often create volatility for the markets. Opportunity often arises out of this volatility and this is our expectation at Lowe Wealth Advisors. We will continue to monitor the situation as it relates to our clients’ portfolios and seek to mitigate risks while we consider potential opportunities the Brexit might create.
Our team here at Lowe Wealth Advisors will be closely watching the events unfold over the weekend. Should we determine further action is warranted we will communicate that to you.
Lowe Wealth Advisors is an SEC registered investment adviser that maintains a principal place of business in the State of Maryland. The Firm may only transact business in those states in which it is notice filed or qualifies for a corresponding exemption from such requirements. For information about the registration status and business operations of Lowe Wealth Advisors, please consult the Firm’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.
This commentary is intended for the dissemination of general information regarding market conditions to Lowe Wealth Advisors clients. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results, and there is no guarantee that the views and opinions expressed in this report will come to pass. While any general market information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and should not be relied on as such or be the basis for an investment decision. Any opinions expressed are current only as of the time made and are subject to change without notice. This is not a recommendation to invest in commodities or any investment strategy. Commodities are historically volatile and not appropriate for every investor.