InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

A rare opportunity to collect more government cash

A rare opportunity to collect more government cashIf you’re over the age of 18, you’re eligible to collect up to $1,003 a month in extra government cash. That’s not an exaggeration! My research proves that every single person who ever applied to the program I’d like to show you today had the chance to receive a check. Better still, all it took was about 90 seconds of their time and a small membership fee of about $20. Get the details here.

 

Alert: Brexit Triggers Global Reaction

By Jim Pearce on June 24, 2016

 

Fears that the British would vote with their feet and leave the European Union came true, narrowly, yesterday, and today markets are paying the price. A slight majority of UK voters (51.9% to 48.1%) felt that greater autonomy was the key to solving the country’s social, economic and political problems. Although the separation may take two years or more to complete, this mandate is rattling the already fragile global financial markets, which must now go through the tedious, unpredictable process of recalculating the value of stocks, bonds and currencies affected by Britain’s departure from the EU.

An hour after U.S. markets opened, they were only down about 2%, and already stabilizing. This doesn’t mean nasty market surprises couldn’t happen, but we would guess after the dust settles—including lots of margin calls and covering short positions—cooler heads will prevail.

At Investing Daily we adhere to a systematic approach for evaluating global financial markets to identify investment opportunities. Emotions can run high, especially in cases like Brexit that involve nationalism as well as the usual greed and fear dominating the markets, often leading to unintended, even disastrous, consequences. For over 40 years Personal Finance has addressed these issues head on, and we will continue to do so as the repercussions of the Brexit vote roll through the global economy in the weeks and months to come. 

Ironically, when I submitted my cover page article for the current issue of Personal Finance a little over two weeks ago on June 8,I noted the apparent lack of anxiety in the global financial markets over the approaching Brexit vote as illustrated by the volatility index. VIX measures the expected volatility in the stock market based on the change in pricing for short-term index options. Had my deadline been just a few days later, that same chart would have shown me that concern was mounting over the referendum, as the VIX jumped 50% between June 8 and June 13.

Simultaneously, the stock market also reflected a heightened level of anxiety with the Standard & Poor’s 500-stock index bottoming out at 2071 on June 17, after cresting above 2119 on June 8–a quick 2% drop based on little more than the fear of the unknown. Neither the VIX nor the S&P 500 ever came close to signaling the same degree of fear that accompanied the steep drop in oil prices earlier this year, suggesting that   the smart money didn’t believe Britain would bail out of the EU.

Now that we know differently, what else can we conclude from Brexit? In the near term, we know this will create havoc in the financial markets, but these three concerns should trouble U.S. investors long term:

  • Whether we care to admit it or not, our economic well-being is inexorably tied to the fortunes of countries over which we have little control. As the result of a tightly contested vote by citizens of a small cluster of nations representing less than 5% of global GDP, the remainder of this year will most likely consist of wild gyrations in the stock, bond and currency markets until a new set of equilibrium values have been discovered.
  • Brexit is only the latest in a series of global events that point to a growing unrest with established political leadership. Whether it was the Arab Spring in the Middle East a few years ago or the rise of rebellious presidential candidates like Donald Trump and Bernie Sanders in the West this year, people everywhere are becoming increasingly vocal in their dissatisfaction with the status quo. New political leadership usually means new economic policy, in some cases policies that are strikingly different, the full impact of which may not be known until decades later.
  • There are no allies when it comes to economic self-determination. Although Britain enjoyed a strong partnership with Europe for the past half century, these alliances of convenience quickly dissolve when voters are left to choose between economic sovereignty and unity. The same issues sparking Brexit currently plague many other European nations, in some cases to a greater degree, so don’t be surprised if other countries eventually follow Britain’s rush for the exit.

So there’s a lot to think about, but no reason to panic. We’ll be shifting our commentary more to foreign markets as a result of Brexit, and factoring it into our portfolios, as needed. But we’ll be sticking to long term, systematic, and profitable investing strategies.

 

 


You might also enjoy…

 

Here’s What’s Really Going to Crush the Market

Most folks understand the basic concept of inflation… things cost more money. But tragically, most don’t understand the real implications of what it means for their financial future. 

Or just how dangerous it’s becoming right now. Today.

And there are two reasons for that…

First, the U.S. government’s calculations barely take into account two of the things you and I are paying more and more for every day: energy and food.

Second, since inflation really hasn’t been an issue for the past 30 years here in the U.S., most analysts won’t dare to say it’s on the rise because they’ll suffer professionally. 

But I’ve made a name for myself by always saying what needs to be said. Which is why I’ve prepared a new special report that’ll give you simple instructions on how to protect yourself from the coming storm.

And better still…

It gives you the full story on the six types of investments that are destined to soar 275%… 375%… even up to 575% over the next few years as the winds of inflation flatten the U.S. economy.

You can get your free copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.