So against the odds, it happened. The UK voted to leave the European Union. A cheeky tenner on a double England exit (after that tragic performance in the football against Iceland) would have netted you GBP427…., though of course your GBP would have been worth a lot less the day after…!
So where does this leave us all, with our hard earned savings / pensions / opportunities. To start lets do the data check
June YTD 12 m
FTSE +4.4% +4.2% +3.7%
Dow Jones +0.8% +1.9% -0.1%
Nasdaq -2.1% -4.4% -4.7%
Dax -5.7% -9.9% -15.8%
Nikkei -7.4% -17.5% -22.8%
Shanghai +0.7% -17.1% -27.6%
Currencies against the USD:
GBP -8.0% -9.6% -15.4%
EUR +0.3% -2.2% +0.6%
JPY -7.0% -14.4% -16.6%
CNY +0.1% +2.5% +7.1%
AUD -2.9% -2.3% +2.7%
Some of those figures may surprise you, considering we have a UK “in crisis” yet its market is top of the table. Interesting comparison during this Brexit month, is the June results for FTSE versus the Dax, the FTSE having performed 10% better than its German counterpart.
This is not to say the stock markets have been an easy place, one of my favourite sectors, Technology has not had the best of months and the Asian numbers are daunting. However owning high yielding stocks with long dividend history, you will have still beat a cash or Gilt return. Use an expert such as two of my favourite managers, Terry Smith (up 33.4% in the last 12 months ) and Nick Train (up 18% in the last 12 months ) then you have grown your wealth significantly.
When I sat in and listened to the post Brexit media, I felt a little sick. Talk of a FTSE collapse a la 2008 , another recession, pensions being drained had no grounding and can imagine how it may scare particularly elderly investors. To give you an idea of the lunacy of these “predictions” the FTSE closed after Brexit at 5923, more than 400 points higher than its lowest point in 2016.
I am happy once again that I generally avoid financials as the bank’s vulnerabilities were again uncovered in the volatile sessions.
The UK certainly has some challenges with its own political parties imploding after the referendum results but how much effect will this really have on the real global players out there, I doubt huge.
I mean what did you do this morning, perhaps some Shredded Wheat for breakfast (Nestle up 7.7% in 12m), brushed your teeth with Colgate toothpaste (Colgate up +10.1% in 12m) and then maybe showered using Dove shower gel (Unilever up +26.3% in 12m to all time high), you’d take all those gains all day long I am sure.
And guess what you will probably do the same tomorrow………..so in the words of our Liverpudlian friends in the picture……. calm down…………..
Have a good weekend