With increased focus on ‘Brexit’ investment clients will undoubtedly be monitoring the impact on financial markets ahead of the referendum date of 23rd June. In the run up we’re going to hear all sorts of analysis, predictions and arguments about the likely results of the UK’s EU referendum including potential implications for our economy, however the reality is that no one can know the result or how either scenario would play out. Brexit is such an emotive subject and during these times emotions can overcome sound investment choices so try to avoid being distracted by ‘noisy’ commentary and maintain your views based on current UK economic fundamentals.

One important thing to remember though is the nature of investment is long term; movements in currencies and shares are often fairly short-lived. We all know stock markets can be as predictable as the English weather, they move and change frequently in both directions and try taking a longer-term approach (typically ten years plus) when it comes to investing. Prepare for those downturns and historically the case is always the longer you stay invested, the greater the chance of smoothing out investment returns.

Inevitably expect that during this uncertain period the sterling will remain weak, as well as short-term money market rates being held down by the Bank of England’s no-change stance on rates; although Britain’s reasonable sound fiscal position should suggest that gilts be less affected. Understandably growth and investment is expected to be modestly lower but don’t expect this to outweigh more important factors such as growth in Europe and the US with broader sentiments in global markets over the medium to long term.

The market implications of a Brexit are difficult to gauge however it’s important to note that a vote to leave the EU would not be the end of the process but the beginning of a new negotiation phase which is likely to take at least a couple of years so during this period existing EU laws and regulations would continue to apply to the UK.

Paul Sweaton, Chief Executive Officer – Vision Independent Financial Planning Ltd

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.