4 Important Tips to Keep Brexit from Gutting Your Retirement

When Janet Yellen testified before the Senate Banking Committee that a UK split from the European Union would “create uncertainty that would lead to market instability,” she wasn’t just whistling Dixie or, for that matter, “God Save the Queen.”
 
The financial effects of Brexit can’t be overestimated. As soon as the final vote was in, the pound sterling declined to its lowest point since 1985. In its place, investors flocked to the US dollar and the yen. Having oscillated in dollar value between 1.13 and 1.14 one day before the Brexit vote, the euro dropped to 1.09 once a final vote was announced.
 
Immediately following the news of Brexit, stocks in Japan tumbled 8% overnight. German stocks shed 10% of their value. The Financial Times 100 stock index tanked 8%. The Dow Jones Industrial average plunged 500 points. Prime Minister David Cameron announced his resignation, as did Jonathan Hill, Cameron’s EU financial services chief.
 
Meanwhile, Moody’s has downgraded the UK’s rating to “negative,” and the Bank of England ponied up 250 billion pounds (340 billion dollars) in liquidity backup for UK banks and markets.
 
The uncertainty of the Brexit activity in the UK has also helped fuel the surging gold price. The issue will be decided by referendum on June 23rd when voters decide whether the UK should leave or remain in the European Union (EU). Two recent surveys have shown that the “leave” group remains ahead, although the campaign was suspended out of respect for British Member of Parliament Jo Cox, who was murdered the other day, presumably for sympathizing with the “remain” group in the controversy.
 
Most Brits are treating the Brexit issue as one of immigration. Membership in the EU requires a member country to honor immigrants from another member country if immigrants choose to work in the EU country of their choice. Ultimately becoming an economic controversy. Prime Minister David Cameron has argued that a Brexit will hobble the UK economy. After the surveys following the “leave” vote, the pound fell 1% against the euro and 1.7% against the dollar for the week.
 
What does this all mean to you and how can you prevent the effects of Brexit from gutting your retirement account? Here are 4 important tips you need to remember:
 
Whatever you do, don’t panic: You may be among half of America’s fulltime workers who, according to Pew Charitable Trusts, participate in their company’s 401(k). If so, you probably have significant holdings in stocks. Now is not the time for a knee-jerk reaction. If you’re significantly down in some of your stock positions, wait! You’d be ill-advised to cash out of holdings while international markets are still enduring agitation from Brexit.
 
You should also understand that Wall Street has minimal exposure to the UK. Less than 3% of companies listed on the S&P 500, and 11.5% of all companies in Europe derive their sales from the UK. You most likely have time to ride them back up again on the ascent of the dollar.
 
Stay away from special deals and quick fixes: If someone approaches you with a deal that looks too good to be true, it almost certainly is just that. Steer clear! Neither Brussels experts, London gurus, nor Wall Street mavens know which stocks will thrive, and which ones will dive, in the wake of Brexit.
 
Keep an ample supply of cash on hand: This is always a recommended practice, especially during a financial crisis. You’ll be less tempted to run up your credit cards or liquidate your stocks just to make frivolous purchases. Besides, banks make mistakes, and they do so more often in lean times.
 
Invest in physical gold: The shiny metal continues to be the world’s best-performing asset class, having moved up almost 30% since January 1, 2016. It remains an exquisite and secure safe haven for both private and professional investors.
 
For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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