Sometimes it takes the markets a while to adjust to a new reality. Yesterday the people of England voted to leave the European Union. The working class want control of their country back which is remarkably similar to what is happening in the United States with the rise of Donald Trump. The uncertainty around what this vote means to the worlds markets is very unclear at the moment. The initial response is always to dump more risky assets in favor of more of a sure thing. Gold and bonds are soaring today as a result. But, like any crisis, revolt, conflict, eventually we move from uncertainty to certainty and the markets start to settle down. At the time of this writing the US markets have already come back 40% from the opening bell.
So, what should you do? Perhaps this is a day to “just stand there” as Jack Bogle has always said which might just be the best piece of advice any of us could ask for. This is not a time to guess what is going to happen or turn emotional for that is where mistakes occur. Remember, today’s reaction will eventually turn into a minor blip on the screen.